IF text 4

The idea that future generations should not be disadvantaged compared to current generations, even if it comes with sacrifices from the current generation.

The practice of valuing future benefits less than present benefits.

The importance of reducing inequality across generations, even if it means sacrificing some benefits for the current generation.

A concept that allows for a more nuanced and realistic understanding of intergenerational justice by separating the concepts of discounting and inequality.

The act of prioritizing benefits for future generations over those for the current generation.

The act of imposing costs on future generations for the benefit of the current generation.

The idea that individuals are more impatient with delayed rewards in the near future than in the distant future.

Taking into account the relative position of different generations in terms of well-being when making policy decisions.

Transforming consumption streams in calendar time into streams where all consumption has equal social value.

A function that combines individual consumption streams into a single measure of social welfare.

A characteristic of an intergenerational discounting function that allows for splitting calendar time into sub-intervals with equal social value.

The measure of a dollar's worth of consumption at different points in time, taking into account both discounting and inequality aversion.

A measure of how much society dislikes unequal distribution of consumption across generations.

The decomposition of social welfare into components reflecting both the overall efficiency of consumption and the degree of inequality.

The comparison of different social welfare functions by considering both discounting and inequality attitudes.

A principle asserting that rearranging consumption across time periods within a generation doesn't change overall social welfare, as long as the total consumption remains the same. This means society is indifferent to how consumption is distributed within a single generation.

A model where future generations' well-being is valued less than current generations. It involves discounting future consumption at a specific rate, making future consumption less valuable.

The tendency to value consuming goods and services now more than consuming them in the future.

A mathematical representation of individual or societal preferences for consuming over time. It captures how people value consuming goods now versus in the future.

The sensitivity of people's consumption choices to changes in interest rates. It indicates how much people are willing to substitute consumption in one period for consumption in another.

A function that combines both discounting and inequality aversion to evaluate social welfare over time, offering a more nuanced approach to intergenerational justice.

A collection of methods used to explore how sensitive the results of an economic model are to changes in its underlying assumptions. It helps assess the robustness of findings by varying key parameters.

A mathematical approach to explain how individuals value future benefits compared to present ones. It considers how people discount future rewards and the factors that influence this discounting.

A model of intertemporal choice where people's preferences for future utility may be influenced by factors such as the time horizon, potential uncertainty, and the relative values of different outcomes.

A concept that ensures that the chosen policies remain the same regardless of the time frame considered. This means that the same policies are chosen independent of the future time horizon or the specific point in time.

The practice of adjusting future values to reflect the current time based on the rate of time discounting used.

A central issue in intergenerational ethics that asks how we should balance the needs and well-being of current generations with the well-being of future generations.

A measurement of the value of a project or policy that accounts for the time value of money. It discounts future benefits back to their equivalent present values.

Refers to the ethical considerations surrounding how we address the potential risks and uncertainties faced by future generations, particularly in contexts like climate change.

In the exponential time-discounting function, this component represents the pure time preference rate reflecting the value we place on present consumption over future consumption.

In this case, the second component of the Atkinson aggregator function signifies the average growth rate in consumption from the initial time period to the present.

A generalization of the Ramsey rule that incorporates both time discounting and inequality aversion, allowing for a more comprehensive evaluation of intergenerational welfare.

This class of social welfare functions uses rank-dependent discounting to weight the welfare of each generation by its position in the distribution of consumption.

A parameter within the rank-dependent social welfare function representing the aversion to inequality in rankings, meaning how much we care about the relative position of individuals in the distribution of consumption.

A parameter within the rank-dependent social welfare function that represents the aversion to inequality in absolute levels of consumption, indicating how much we dislike differences in the actual amount of resources people have.

A social welfare function W is Paretian if, for any consumption streams c and c' where c(t) > c'(t) for all times t and the total consumption over some period is greater for c than for c', then W(c) > W(c'). This means that if everyone is better off in one consumption stream compared to another, society as a whole is also better off.

A social welfare function W is modular if it can be expressed as the sum of individual utilities, where each utility function represents the well-being of a specific generation.

First-order stochastic dominance (FSD) applies to distributions. If one distribution, y, is consistently above another, y', for all values, and the total area under y is greater than the area under y', then y is said to dominate y' in the sense of FSD. This implies that the distribution represented by y is 'better' than the distribution represented by y'.

A progressive transfer is a redistribution of resources where a wealthier generation ('donor') transfers some of their wealth to a poorer generation ('recipient'), without any leakage. The Pigou-Dalton transfer principle states that such transfers should always increase social welfare.

The axiom of inequality aversion, in a discounting context, states that if a social welfare function is indifferent to the order of consumption between two generations, it should prefer a reduction in inequality between those generations.

The axiom of inequality aversion, in the discounting context, involves a hypothetical situation where consumption is exchanged between generations T1 and T2. If society is indifferent to the order of consumption, then a progressive transfer between these generations, achieving greater equality in consumption, will lead to a higher level of social welfare.

A social welfare function exhibits inequality aversion if, for any two possible scenarios where consumption is switched between two generations, if the function is indifferent to the ordering of consumption, then a progressive transfer between these generations will increase social welfare. This implies that the function prefers a more equitable distribution of consumption across generations, even if it means slightly less overall consumption.