Characterizing sustainability: The converse of Hartwick’s rule
نویسندگان
چکیده
This note offers a general proof of the converse of Hartwick’s rule, namely that — in an economy with stationary instantaneous preferences and a stationary technology — an efficient constant utility path is characterized by the value of net investments being zero at each point in time. In a one consumption economy with two stocks — a stock of a natural resource and a stock of man-made capital — this means that if consumption remains constant at the maximum sustainable level, then the accumulation of man-made capital always exactly compensates in value for the depletion of the natural resource. ( 1998 Elsevier Science B.V. All rights reserved. JEL classification: C61; Q20; Q30
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