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Tanguy Isaac
''Sustainability is compatible with decreasing social welfare''
( 2013, Vol. 33 No.2 )
This note studies the determination of optimal path - i.e. maximizing the intertemporal social welfare - under a sustainability constraint defined as a non-decreasing intertemporal social welfare accross time. We show that this definition suffers from an important drawback : the path obtained is not Pareto optimal. It is a drawback because nothing in our intuition of sustainable allocation justifies to give up a Pareto improvement. This implies also the possibility of false-negative result in the empirical studies aiming to determine if a country is on a sustainable path.
Keywords: sustainability, optimal path, Brundtland criterion
JEL: D6 - Welfare Economics: General
Manuscript Received : Nov 12 2012 Manuscript Accepted : Apr 30 2013

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