A Blueprint for Optimal Intertemporal Consumption Under Environmental Constraints: The Modified Green Golden Rule
14 Pages Posted: 12 Oct 2006
Date Written: October 12, 2006
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
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