A number of philosophers from Hobbes to Mill to Parfit have held some combination of the following views about the Golden Rule: (a) It is the cornerstone of morality across many if not all cultures. (b) It affirms the value of moral impartiality, and potentially the core idea of utilitarianism. (c) It is immune from evolutionary debunking, that is, there is no good naturalistic explanation for widespread acceptance of the Golden Rule, ergo the best explanation for its appearance in different traditions is that people have perceived the same non-natural moral truth. De Lazari-Radek and Singer employ all three of these claims in an argument meant to vindicate Sidgwick's ‘principle of universal benevolence’. I argue that the Golden Rule is the cornerstone of morality only in Christianity, it does not advocate moral impartiality, and there is a naturalistic explanation for why versions of the Golden Rule appear in different traditions.

How much should society invest in medical care that extends the lives of the older generations? We derive a golden rule for the level of health care expenditures and find that the optimal level of life-extending health care expenditures should increase with rising productivity, increase with the retirement age, and also increase with the population growth rate if a higher growth rate lowers the ratio of retirees to working-age people sufficiently, while the effects of an improvement in medical technology are ambiguous. Moreover, we find that a market economy may be inefficient in terms of the provision of life-extending health care because an individual ignores the effect of his own longevity on the income of others.

The European sovereign debt crisis has revived the debate about appropriate fiscal rules in the European Economic and Monetary Union. Whereas the Stability and Growth Pact and the Fiscal Compact make no distinction between public consumption and investment expenditure, the aim of the current paper is to analyze the implications of the adoption of the Golden rule in a monetary union, distinguishing between the two types of public expenditure. With the help of a macroeconomic model, we show that introducing a Golden rule and smoothing public investment expenditure would be welfare-improving, and mostly for countries where taxation rates and the productivity of public investment are highest, and for the most closed countries. It would also be the most beneficial for countries where the monetary transmission parameter, the propensity to consume, and the price elasticity of supply are weakest, whereas supply-side distortions are the strongest.

This paper analyzes the dependence of average consumption on the saving rate in a one-sector neoclassical Solow growth model with production shocks and stochastic rates of population growth and depreciation where arbitrary ergodic processes are considered. We show that the long-run behavior of the stochastic capital intensity, and hence average consumption along any sample path, is uniquely determined by a random fixed point that depends continuously on the saving rate. This result enables us to prove the existence of a golden-rule saving rate that maximizes average consumption per capita. We also show that the golden-rule path is dynamically efficient. The results are illustrated numerically for Cobb–Douglas and CES production functions.

The stationary sunspot equilibria of a simple overlapping generations economy with heterogeneous agents are considered. These equilibria are known to be suboptimal. The focus of the paper is on the efficacy, based on welfare economic considerations and informational requirements, of government policy in such an environment. The main result is that knowledge of the sunspot equilibrium net trades, weak interval-type information on two parameters, and weak set-type information on the location of some optimal stationary allocation is sufficient to induce a competitive equilibrium that is a Pareto optimal Pareto improvement over the sunspot allocation, which has the further property of reaching a Pareto optimal stationary allocation in finite time. The results are interpreted as demonstrating that, in a simple model with a sunspot environment, policy is very effective and welfare economic considerations lead to stabilization.