Bréchet, Thierry
[UCL]
Lambrecht, Stéphane
We develop an overlapping-generation model la Diamond with a nona constant population growth in which households privately own a natural renewable resource and have a family-altruism resource bequest motive. The natural resource can be either extracted and sold to the producing firms as a production factor, or bequeathed to the offspring to increase his adult disposable income. With a numerical application, we analyze how family altruism interplays with population growth to shape the dynamics of the whole economy. We also highlight the role of altruism in the case of a temporary negative demographic shock. The simulations we present show that a fall in the size of families increases the family natural resource stock but reduces resource extraction on the transition, through a reinforcement of family altruistic links. Hence, family altruism plays a key role in the recovery of the economy after the shock.
Bibliographic reference |
Bréchet, Thierry ; Lambrecht, Stéphane. Family altruism with a renewable resource and population growth. CORE Discussion Papers ; 2006/35 (2006) |
Permanent URL |
http://hdl.handle.net/2078.1/4489 |