2002 Articles

Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity

Stavins, Robert N.; Wagner, Alexander F.; Wagner, Gernot

Economists have confined the concept of 'sustainability' to intertemporal distributional equity. We propose a broader definition, combining dynamic efficiency and intergenerational equity, and relate it to two concepts from neoclassical economics: potential Pareto-improvements and inter-personal compensation.