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The paper analyzes resource policies in an economy in which renewable and fossil resources are realistically assumed to be essential inputs to production. Also realistically, the two types of resources are imperfect substitutes whose degree of substitutability can, however, increase over time....
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is compared with hyperbolic discounting within a standard life-cycle setting of consumption and savings. We show …-equation from the hyperbolic discounting model with an additional adjustment factor. In the numerical section it is shown that the … not possible with a hyperbolic discounting model. …
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discounting provides the same present value of a constant infinite income stream as standard exponential discounting, then the … equilibrium rate of economic growth is also the same under both discounting methods. In this sense present-bias and the entailed …
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