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A Blueprint for Optimal Intertemporal Consumption Under Environmental Constraints: The Modified Green Golden Rule

14 Pages Posted: 12 Oct 2006  

Giovanni Bella

Universita di Cagliari - Department of Economics

Date Written: October 12, 2006

Abstract

The notion of sustainability represents the core of the theoretical and political debate on the potential conflict between economic growth and environmental quality. A clear definition of what sustainability means, although still controversial, is indeed a possible keystone to better understanding what is Environmental Economics needed for. To this end, this paper aims at providing a theoretical analysis by means of a neo-classical framework, and consequently define a modified version of the common green golden rule that an economy might follow to drive the system onto the path where both optimal intertemporal consumption and sustainable growth are finally reconciled.

Keywords: Sustainable growth, neoclassical model, intertemporal consumption

JEL Classification: C61, E13, Q01

Suggested Citation

Bella, Giovanni, A Blueprint for Optimal Intertemporal Consumption Under Environmental Constraints: The Modified Green Golden Rule (October 12, 2006). Available at SSRN: https://ssrn.com/abstract=936879 or http://dx.doi.org/10.2139/ssrn.936879

Giovanni Bella (Contact Author)

Universita di Cagliari - Department of Economics ( email )

V. S. Ignazio 17
Cagliari 09123, CA 09123
Italy

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