The MBR intertemporal choice criterion and Rawls' just savings principle

This paper provides general theorems about the control that maximizes the mixed Bentham-Rawls (MBR) criterion for intergenerational justice, which was introduced in Alvarez-Cuadrado and Long (2009). We establish su¢ cient concavity conditions for a candidate trajectory to be optimal and unique. We also show that the state variable is monotonic under rather weak conditions. And …nally we prove that inequality among generations, captured by the gap between the poorest and the richest generations, is lower when optimization is performed under the MBR criterion rather than under the discounted utilitarian criterion. The two last properties are in line with some aspects of the rawlsian just savings principle. Keywords: intergenerational equity, just savings principle. JEL Classi…cation: D63, H43, O21, Q20. INRA-LAMETA, 2 Place Viala, 34060 cedex 1. Montpellier. France. Email: [email protected]. yDepartment of Economics, McGill University, Montreal, Canada H3A 2T7. Email: [email protected]. zINRA-LAMETA, 2 Place Viala, 34060 cedex 1. Montpellier. France. Email: [email protected].