Intergenerational Justice: What do we owe future generations?: Hilary Term Seminar Series 2011

Professor Asheim, Department of Economics, University of Oslo, gives a talk for the Oxford Martin School Hilary Term Seminar Series 2011 Intergenerational Justice: What do we owe future generations? Economists sometimes claim that generations cannot be treated equally. Some even argue that future generations must be given less weight than the present generation. Prof. Asheim will explain the basis for this claim and discuss ways in which it is still possible to balance present and future interests. In particular, new research within the field of social choice theory suggests ways to combine sensitivity to interests of the present with respect for the interests of the future.

Dr Martin Weale, of the Bank of England Monetary Policy, gives a talk for the Oxford Martin School 2011 Hilary Term Seminar Series; Intergenerational Justice: What do we owe future generations? We assess fiscal policy from the perspective of fairness between generations and the relationship between this and national saving, in the context where the United Kingdom is one of the lowest saving of all the OECD economies. Cross-section and pooled data suggest that governments are in a position to influence national saving and we set out a simple overlapping generation model to show the effects of national debt, of pay-as-you-benefit systems, and of legacies and movements to land prices as means of effecting transfers between generations. Having shown that governments can influence the distribution of resources between generations we then discuss three notions of fairness between generations: (i) that each cohort should pay its own way; (ii) that a social planner should reallocate resources between generations to achieve an inter-temporal optimum; and (iii) that resources should be reallocated so that generations alive at the same time have similar living standards. In the light of these observations we discuss appropriate responses to a variety of economic shocks and we conclude with implications for policy in the aftermath of the recession.