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arxiv: 2409.15978 · v6 · pith:KDJLDFFRnew · submitted 2024-09-24 · 💰 econ.GN · q-fin.EC

Optimal longevity of a dynasty

classification 💰 econ.GN q-fin.EC
keywords optimaldynastyeconomieshorizonlongevityfinitegrowthintergenerational
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Standard optimal growth models implicitly impose a ``perpetual existence'' constraint, which can ethically justify infinite misery in stagnant economies. This paper investigates the optimal longevity of a dynasty within a Critical-Level Utilitarian (CLU) framework. By treating the planning horizon as an endogenous choice variable, we establish a structural isomorphism between static population ethics and dynamic growth theory. Our analysis derives closed-form solutions for optimal consumption and longevity in a roundabout production economy. We show that under low productivity, a finite horizon is structurally optimal to avoid the creation of lives not worth living. This result suggests that the termination of a dynasty can be interpreted not as a failure of sustainability, but as an altruistic termination to prevent intergenerational suffering. We also highlight an ethical asymmetry: while a finite horizon is optimal for declining economies, growing economies under intergenerational equity demand the ultimate sacrifice from the current generation.

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