A small but growing body of literature uses overlapping generations （OLG） models to study environmental policy for long-lived problems such as climate change. An OLG model, unlike the infinitely lived representative...A small but growing body of literature uses overlapping generations （OLG） models to study environmental policy for long-lived problems such as climate change. An OLG model, unlike the infinitely lived representative agent model, dis- tinguishes between impatience with respect to one＇s own future utility, and attitudes toward successors＇ utility. I discuss the problem of time inconsistency, the role of Markov perfection, and show that a class of OLG models can be studied using me- thods developed to analyze models of non-constant discounting. An example illu- strates the techniques and determines the conditions under which, in equilibrium, there is under-investment or over-investment in natural capital.展开更多
文摘A small but growing body of literature uses overlapping generations （OLG） models to study environmental policy for long-lived problems such as climate change. An OLG model, unlike the infinitely lived representative agent model, dis- tinguishes between impatience with respect to one＇s own future utility, and attitudes toward successors＇ utility. I discuss the problem of time inconsistency, the role of Markov perfection, and show that a class of OLG models can be studied using me- thods developed to analyze models of non-constant discounting. An example illu- strates the techniques and determines the conditions under which, in equilibrium, there is under-investment or over-investment in natural capital.
