Taste for nature and long-run cycles - Centre d'Étude des Politiques Économiques Access content directly
Preprints, Working Papers, ... Year : 2024

Taste for nature and long-run cycles

Abstract

From a dynamic perspective, the existing literature on renewable re- sources in a Ramsey economy is puzzling. On the one hand, the central plannerís solution leads to the occurrence of limit cycles around the lower steady state (Wirl, 2004); on the other hand, limit cycles arise in a market economy around the higher steady state (Bosi and Desmarchelier, 2018). To reconcile these Öndings, we study the competitive equilibrium of a discrete-time Ramsey-Cass-Koopmans model with a renewable resource, where preferences are represented by two di§erent utility functions with Constant Static Elasticity of Substitution (CSES) and Constant Intertem- poral Elasticity of Substitution (CIES). In the CSES case, we recover the dynamics highlighted by Wirl (2004), while, in the CIES case, the ones obtained by Bosi and Desmarchelier (2018). Moreover, this conclusion is robust under two alternative regeneration processes for the resource (power and logistic laws). In other words, the dynamics seems to depend more on the preference structure than on the market structure (central planner versus market economy).
Fichier principal
Vignette du fichier
Bosi-Desmarchelier-Thai (2024).pdf (267.71 Ko) Télécharger le fichier
Origin Files produced by the author(s)

Dates and versions

hal-04597701 , version 1 (03-06-2024)

Identifiers

  • HAL Id : hal-04597701 , version 1

Cite

Stefano Bosi, David Desmarchelier, Thai Ha-Huy. Taste for nature and long-run cycles. 2024. ⟨hal-04597701⟩
72 View
29 Download

Share

Gmail Mastodon Facebook X LinkedIn More