Working Paper
Constant Consumption and the Economic Depreciation of Natural Capital: The Non-Autonomous Case
Ngo Van Long, John M. Hartwick
CES, Munich, 1996
CES Working Paper No. 114
CES, Munich, 1996
CES Working Paper No. 114
![](https://cesifo.org/DocImg/ces_wp114.jpg?c=1689236946)
We investigate economic depreciation of natural capital for cases of non-stationary output prices, technology, and interest rates. For the former two cases (exogenous movements in prices and technology), constant consumption emerges under a strategy of investing to cover off economic depreciation. The interest rate case requires a modified sinking fund strategy.
Keywords: economic depreciation, natural capital, environment, constant consumption.