Intragenerational inequality aversion and intergenerational equity

A new study, published in the European Economic Review, studies the interplay between intragenerational and intergenerational equity in an economy with two countries producing and consuming from national capital stocks. It characterizes the sustainable development path that a social planner would implement to achieve intertemporal egalitarianism.

The paper shows: If intergenerational equity is dened with respect to the global consumption of each generation regardless
of its distribution between countries, consumption in the poor country should be set as low as possible to maximize investment and hasten convergence, resulting in important intragenerational inequality. When social welfare accounts for intragenerational equity, the larger the intragenerational inequality aversion (IIA), the smaller the sacrice asked of the poor country, but the lower the sustained level of generational welfare. Along the intertemporal welfare-egalitarian path with IIA, consumption in the poor country increases, while it decreases in the rich country, resulting in a global degrowth.


Martinet, V., Stellio Del Campo, Robert D. Cairns (2022). Intragenerational inequality aversion and intergenerational equity. In: European Economic Review, 104075, ISSN 0014-2921, .