the concept of natural capital the natural environment is now commonly viewed as a form of capital asset or natural capital also included are ecosystems that provide important goods and services to the economy managing natural capital has consequences for sustainable development however there are contrasting weak versus strong sustainability views which in turn have implications for green accounting natural resource based sovereign wealth funds have emerged as key financial instruments for compensating resource depreciation with greater economy wide investments recent scientific evidence recommends demarcating safe operating spaces to limit exploitation of critical global biophysical subsystems or processes these challenges suggest that the concept of natural capital is pivotal to sound policy

concession bargaining the meaning of union gains the article reports on a study which measured the indirect impact of union gains or concession bargaining on the economic interests of firms a discussion is presented about various categories and

accounting for the value of ecosystem services abstract a value of ecosystem services ves may be calculated by multiplying a set of ecosystem services by a set of corresponding shadow prices this paper examines the role of the ves concept in measuring trends in human well being under conventional arguments from applied welfare economics standard measures of market consumption may be extended to include the value of direct environmental services which affect welfare in ways that are not mediated by the consumption of purchased goods the ves concept does not capture values such as ecological sustainability and distributional fairness that are not reducible to individual welfare and its operationalization is constrained by the well known limitations of nonmarket valuation methods nonetheless attempts to calculate the value of environmental services can provide insights into the tradeoffs between market activity and environmental quality that are implicit in the process of economic growth such efforts can promote informed debate concerning the achievement of sustainable development

air pollution and green accounts a simple model treating air emissions as cumulative pollutants is used to derive measures of green net national product the model implies that pollution emissions are properly valued at their marginal social costs in the measurement of green nnp the level of genuine savings net savings less the value of resource depletion and pollution emissions is shown to provide a useful indicator of sustainable development recent figures on the social costs of fuel cycles are used to derive genuine savings measures for the uk and other european nations several countries had negative genuine savings during the 1980s

net national product as a welfare indicator the question of whether changes in net national product nnp will measure changes in welfare is investigated in this paper m weitzman 1976 demonstrated that under specific conditions nnp is proportional to discounted consumption the result requires nnp to be measured in current prices in utility units changes in real nnp measured using given prices from a base year will not represent a complete account of welfare changes copyright 1994 by the editors of the scandinavian journal of economics

the role of technological progress in testing adjusted net savings evidence from oecd countries abstract in this paper we investigate the relationship between comprehensive measures of savings and changes in future consumption in oecd countries this relationship is at the basis of the interpretation of adjusted net savings as a weak sustainability indicator and so evidence of its validity provides support to the use of this indicator we construct various measures of comprehensive savings for 20 oecd countries to include depletion from non renewable resources human capital investment and technological progress given their importance especially for rich countries we focus on the role of technical progress and human capital in the form of changes in education level we do not find strong evidence in favor of including green adjustments in the conventional net savings however we find compelling evidence for the inclusion of technological progress since this involves a forward looking term the above result suggests that to construct an indicator of weak sustainability from conventional net savings some estimate of future technological progress is needed

on the intergenerational allocation of natural resources it is known hartwick and others that under standard assumptions a society that invests in reproducible capital the competitive rents on its current extraction of exhaustible resources will enjoy a consumption stream constant in time it is shown here that this result can be interpreted as saying that an appropriately defined stock of capital including the initial endowment of resources is being maintained intact and that consumption can be interpreted as the interest on that patrimony this seems like a useful rule of thumb for policy

international trade and the sustainability footprint a practical criterion for its assessment a simple and minimal criterion for sustainability is that the value of natural capital plus manufactured capital be not decreasing on the basis of any individual country or region the above simple comparison may be misleading as it does not take account of the production of goods for consumption in other countries regions via international trade in other terms the full environmental footprint of a country may not be properly assessed a method of calculating a weak sustainability criterion has been established for both a closed economy approach and an open economy approach there are significant differences between the open and closed economies measures for several regions particularly the middle east overall global sustainability on this criterion has been positive and increasing using a difference equation approach a further analysis has been made of the average proportional rate of change of global sustainability between 1980 and 1990 and its various regional and structural components have been determined these indicate that most of global sustainability growth can be attributed to western europe other asia and japan particularly through high savings ratios the usa on the other hand has made a very small net contribution to the growth in global sustainability

the concept of income in a general equilibrium this paper derives a concept of aggregate real income for a competitive economy in general equilibrium consisting of heterogeneous infinitely lived people and relates it to current and future consumption possibilities an important characteristic of our measure of income which we call real income is that deflation is carried out using a consumption deflator rather than any price index of output we suggest that it may be inappropriate to regard capital gains as income we also present a coherent treatment of the effects of changes to the terms of trade on real income and explain the implications of this for resourceexporting economies hicks 1939 defined income as the maximum amount a man can spend and still be as well off at the end of the week as at the beginning since then there has been a succession of attempts to apply this definition the problem is as hicks acknowledged that the correct interpretation of as well off is by no means clear weitzman 1976 and asheim 1997 suggest that income is equal to the level of consumption which could be sustained indefinitely out of the capitalized value of current income and equate this to being as well off at the end of the week as at the beginning eisner 1988 argues specifically that in a total incomes system effects arising from asset price changes and conventionally regarded as capital gains should be included with income here building on earlier work by sefton and weale 1996 asheim and weitzman 2001 and pemberton and ulph 2001 we provide a comprehensive account of the implications of the idea that as well off should be understood to mean that the present discounted value of current and future utility should be unchanged over the interval considered we work in the context of a general equilibrium taking the prices established in the general equilibrium as given we first look at income from the production side showing that in an economy where prices and the interest rates satisfy an intertemporal efficiency condition income along an equilibrium path can be interpreted as a weighted average of the value of the current and future consumption bundle plus a term adjusting for changes in the nominal price level converting prices to real prices by deflating by the divisia consumption price index removes the need for this adjustment these results are suggestive first they offer a way of defining the income of a household entirely in terms of its consumption possibilities second they indicate that to calculate real income deflation is best carried out using a price index of consumption this is a substantial divergence from current national accounting practice third because we have assumed constant returns there is a trivial aggregation result that aggregate income is equal to the sum of the incomes from the individual sectors

genuine savings and sustainability genuine savings gs has emerged as the leading economic indicator of sustainable economic development at the country level it derives from the literatures on weak sustainability wealth accounting and national income accounting we discuss the theoretical underpinnings of gs focusing on the relationship between changes in a nation s extended capital stock and the future path of consumption the indicator has entered widespread use propelled by the world bank s publications despite its varying performance as a predictor for future consumption notwithstanding the extensive body of literature reviewed promising future research avenues are identified

net national product as an indicator of sustainability net national product nnp can potentially serve several objectives among others to measure value added and to be an indicator of welfare in the aftermath of the world commission on environment and development however it also seems important to investigate whether the concept of nnp can serve as an indicator of sustainability my point of departure following hicks 1946 ch 14 is therefore to require that nnp should measure what can be consumed in the present period without reducing future consumption possibilities and in line with this to argue that the nnp should equal the maximum per capita consumption level that can be sustained if sufficiently many facilitating assumptions are made then a concept of nnp that serves as an exact indicator of sustainability can easily be constructed for instance for a closed economy with a constant population a stationary technology and with only one capital good it follows that the present does not reduce future consumption possibilities if and only if it does not decrease the stock of the single capital good hence under the assumption that the one capital good k is identical to the one consumption good x nnp defined as y x k measures the maximal sustainable consumption at time t because then x y is equivalent to k the purpose of this note is to establish that with multiple capital goods it is not in general possible to construct an exact indicator of sustainability on the

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

re thinking economic progress the call for countries to pursue sustainable development and in doing so place the environment at the heart of policy making was established notably in the report of the brundtland commission in 1987 wced 1987 and at the earth summit meeting between world leaders in rio de janeiro in 1992 many national governments have now pledged a commitment to this goal and the transformation of these pledges into policy is a formidable challenge faced by decision makers it also raises fundamental questions regarding the design of indicators needed to construct suitable policy responses and furthermore to monitor progress towards stated goals allied to this is a feeling of dissatisfaction with the way in which economic progress is currently evaluated in particular this unease has found a focus in often trenchant criticism of the perceived emphasis of policymakers on changes in gross domestic product gdp this has led over the past decade to a view that unless the way in which progress is currently evaluated is changed or at least augmented commitments to sustainability or environmental goals will be largely meaningless of particular interest in this respect are proposals for the construction of green alternatives to gdp

measuring sustainable development some empirical evidence for france from eight alternative indicators abstract this paper presents results from a time series analysis of eight measures of development and or sustainability for france the measures chosen are green national net product genuine savings ecological footprint indicator of sustainable economic welfare genuine progress indicator pollution sensitive human development indicator sustainable human development indicator and french dashboard on sustainable development a theoretical description of each index highlights their advantages and drawbacks underlining the fact that no indicator is perfect and no one can give an exhaustive view of sustainable development therefore the analysis of various indicators is necessary to evaluate sustainable development with accuracy empirical results of measures of well being show that french development was improving between 1990 and 2000 concerning sustainability indicators support different conclusions it seems that french development was weakly sustainable but unsustainable in the strong sense over the period examined

adjusting green nnp to measure sustainability weitzman provides a foundation for nnp as the stationary equivalent of a wealth maximizing path when there is a constant interest rate and no exogenous technological progress here the implications of weitzman s foundation are explored in a case encountered in resource models i e the case of non constant interest rates in a setting that allows for exogenous technological progress an expression for nnp is obtained that adjusts green nnp for anticipated capital gains and interest rate effects to produce a measure that indicates sustainability this result is important when measuring the relative sustainability of resource rich and resource poor countries i introduction how should net national product nnp be adjusted for the depletion of natural and environmental resources a prerequisite for examining this problem is to decide on an underlying notion of income at the personal level hicks 1946 defines income as the consumption that if kept constant would yield the same present value as a person s actual future receipts since market prices are not influenced by any single person this notion of income equals a person s maximal sustainable consumption at the national level national income can likewise be defined as the consumption that if kept constant would yield the same present value as the actual future consumption path unless the nation is a small open economy faced with given international prices this notion of national income will exceed

the rise fall and sustainability of capital resource economies in debates about green accounting it is sometimes argued that a positive value of aggregate investments indicates that an economy is developing sustainably asheim 1994 and pezzey 1994 have shown that this is wrong using a version of the well known dasgupta heal economy with one capital and one non renewable resource stock as a counterexample asheim s proof referred to the unproved assumptions that in such an economy a higher rate of time preference induces higher initial consumption and vice versa and that optimal consumption is initially rising and then falling here we show that these assumptions do hold true under certain circumstances thereby also proving some of dasgupta and heal s other conjectures about sustainability

accounting for the wealth of nations the net versus gross output controversy and its ramifications there has been a longstanding controversy over the use of net versus gross measures of national product in accounting for economic growth most recently reflected in several papers which have examined the role of environmental variables it is argued in this paper that the two measures are not substitutes but complements which reveal different aspects of the growth process gross product is the correct output concept for estimating the structure of production while net product is the correct concept for measuring the welfare consequences of economic growth an alternative to the conventional solow growth accounting framework is then presented in which the change in national wealth is decomposed into its component elements copyright 1992 by the editors of the scandinavian journal of economics

natural resources national accounting and economic depreciation abstract the current value hamiltonian in an aggregate optimal growth problem with heterogeneous capital stocks including exhaustible renewable and environmental stocks is the nnp function routine substitutions reveal that the using up of natural resource stocks is representable as easy to interpret economic depreciation magnitudes we obtain true nnp inclusive of natural resource stock diminution implications for actual national accounting practices are also discussed

capital gains and net national product in open economies it is shown within a given framework that with the world economy following an egalitarian path the aggregate capital gains being positive is equivalent to the interest rate tending to decrease this result is of importance for the concept of net national product in open economies in particular with positive aggregate capital gains an open economy cannot sustain consuming the return on its capital stocks since some part of the return must be used to augment the country s national wealth it is established that a country s share of world wide sustainable consumption equals its share of worldwide wealth

on sustainability and social welfare abstract this paper proposes to define sustainability in terms of leaving it possible for future generations to sustain certain defined targets it is shown that variants of genuine savings and the ecological footprint can then serve as indicators of sustainability the link between sustainability and intergenerational welfare is examined and it is shown how to incorporate indicators of sustainability into a social welfare measure including risk in the analysis

economic shocks and crime evidence from the crash of ponzi schemes abstract in november 2008 colombian authorities dismantled a network of ponzi schemes making hundreds of thousands of investors lose tens of millions of dollars throughout the country using original data on the geographical incidence of the ponzi schemes this paper estimates the impact of their breakdown on crime we find that the crash of ponzi schemes differentially exacerbated crime in affected districts confirming the intuition of the standard economic model of crime this effect is only present in places with relatively weak judicial and law enforcement institutions and with little access to consumption smoothing mechanisms such as microcredit in addition we show that with the exception of economically motivated felonies such as robbery violent crime is not affected by the negative shock

hicksian income from resource extraction in an open economy we derive a measure of national income defined in terms of maximum sustainable per capita consumption if population and interest rates are constant the income generated by natural resource extraction is the return on resource wealth defined as the present value of future resource rents with a growing population or declining interest rate sustainability requires net increases in wealth over time the income from extraction of nonrenewable resources can exceed resource rents contrary to the conclusions of el serafy 1989 and repetto et al 1989 finally we present an example illustrating the hazard of consuming the full increment of hicksian income

genuine saving and the social cost of taxation following the 1987 report by the world commission on environment and development the genuine saving has come to play a key role in the context of sustainable development and the world bank regula