Efficiency = Equity and Other Musings on Economics and Sustainable Development

Conventional wisdom says that equity concerns are beyond the scope of economic analysis and that achieving equity objectives will often come at a cost in terms of efficiency. Examination of the underlying meaning of efficiency and how it is defined, however, reveals that this tension between efficiency and equity is more apparent than real. The paper also explores the application of other economic concepts to the field of sustainable development, including the use of discounting for present value, Gross Domestic Product as a measure of well-being, and rational utility maximisation vs. bounded rationality as models of human behaviour.