Constant Savings Rates and Quasi-Arithmetic Population Growth Under Exhaustible Resource Constraints

31 Pages Posted: 11 Nov 2005

See all articles by Geir B. Asheim

Geir B. Asheim

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Wolfgang Buchholz

Universitaet Regensburg; CESifo (Center for Economic Studies and Ifo Institute)

John M. Hartwick

Queen's University

Tapan Mitra

Cornell University - Department of Economics

Cees Withagen

Free University of Amsterdam; Tilburg University

Date Written: October 2005

Abstract

In the Dasgupta-Heal-Solow-Stiglitz model of capital accumulation and resource depletion we show the following equivalence: If an efficient path has constant (gross and net of population growth) savings rates, then population growth must be quasi-arithmetic and the path is a maximin or a classical utilitarian optimum. Conversely, if a path is optimal according to maximin or classical utilitarianism (with constant elasticity of marginal utility) under quasiarithmetic population growth, then the (gross and net of population growth) savings rates converge asymptotically to constants.

Keywords: constant savings rate, quasi-arithmetic population growth

JEL Classification: Q10, Q32

Suggested Citation

Asheim, Geir B. and Buchholz, Wolfgang and Hartwick, John M. and Mitra, Tapan and Withagen, Cees A. M., Constant Savings Rates and Quasi-Arithmetic Population Growth Under Exhaustible Resource Constraints (October 2005). CESifo Working Paper Series No. 1573, Available at SSRN: https://ssrn.com/abstract=845347

Geir B. Asheim (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47-2285 5498 (Phone)
+47-2285 5035 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Wolfgang Buchholz

Universitaet Regensburg ( email )

D-93040 Regensburg, 93053
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

John M. Hartwick

Queen's University ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada K7L 3N6

Tapan Mitra

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States
607-255-6283 (Phone)

Cees A. M. Withagen

Free University of Amsterdam ( email )

Tinbergen Institute De Boelelaan 1105
1081 HV Amsterdam
Netherlands

Tilburg University ( email )

Postbus 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

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