Global degrowth predicted as poor countries sacrifice for intergenerational equity.
The article explores how to achieve fairness within and between generations in an economy with two countries. It shows that to promote equality over time, the poor country should consume less to invest more, leading to inequality within generations. When considering fairness within generations, the more averse we are to inequality, the less the poor country needs to sacrifice, but overall welfare decreases. As a result, consumption in the poor country rises while it falls in the rich country, leading to global degrowth.
