Assessing the Parfit's Repugnant Conclusion within a canonical endogenous growth set-up

Abstract

Parfit's Repugnant Conclusion stipulates that under total utilitar- ianism, it might be optimal to choose increasing population size while consumption per capita goes to zero. We evaluate this claim within a canonical AK model with endogenous fertility and a reduced form re- lationship between demographic growth and economic growth. While in the traditional linear dilution model, the Parfit Repugnant Conclu- sion can never occur for realistic values of intertemporal substitution, we show that it occurs when population growth is linked to economic growth via an inverted U-shaped relationship. Finally, we find moving from the Benthamite to the Millian social welfare function may not only cause optimal population size to go up and consumption to go down, it may also favor the realization of the Repugnant Conclusion.Parfit's Repugnant Conclusion, AK models, endogenous fertility, intertemporal altruism