The paper proposes two axioms that capture the idea of sustainable development and derives the welfare criterion that they imply. The axioms require that neither the present nor the future should play a dictatorial role.Theorem 1 shows there exist sustainable preferences, which satisfy these axioms.They exhibit sensitivity to the present and to the long-run future, and specify trade-offs between them. It examines other welfare criteria which are generally utilized: discounted utility, tim inf. long run averages, overtaking and catching-up criteria, Ramsey's criterion, Rawlsian rules, and the criterion of satisfaction of basic needs, and finds that none satisfies the axioms for sustainability.Theorem 2 gives a characterization of all continuous independent sustainable preferences. Theorem 3 shows that in general sustainable growth paths cannot be approximated by paths which approximate discounted optima. Proposition 1 shows that paths which maximize the present value under a standard price system may fail to reach optimal sustainable welfare levels, and Example 4 that the two criteria can give rise to different value systems.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.