confusing liquidation with income in bc s forests economic analysis and the bc forest industry abstract forest exploitation in british columbia is currently unsustainable economic analysis is frequently used to justify the high rate of cut by documenting the revenue job and wage benefits of current industrial forestry however hicks definition of income implies that it is poor accounting practice to count the consumption of natural capital as income yet in bc economic analysis fails to make adjustments for the consumption of forest capital such analysis provides society with misleading signals of future economic prospects by reference to landscape ecology conservation biology forest ecology and ecosystem based management this paper sets out requirements for a forest management regime that maintains forest capital intact and for determining a rate of cut that would likely maintain ecosystem structure and function this ecologically sustainable rate of cut can be seen as an extraction ceiling extraction beyond this ceiling is considered to involve natural capital consumption this extraction ceiling is used to divide the proceeds from timber extraction into interest and depletion streams the interest stream is consistent with maintaining capital intact and can be considered true income the depletion stream involves capital consumption basing economic analysis of the forest industry on an extraction ceiling encourages debate about defining sustainable extraction levels and about how to make the transition to sustainable forestry it also shows that the timber industry overstates its contribution to government revenues and to the province s economic well being critics of industrial forestry in bc have yet to take full advantage of how proper accounting for natural capital depletion can show the advantages to moving towards an ecoforestry approach by insisting that economists make adjustments where natural capital depletion is projected to occur advocates of ecoforestry can ensure a more level playing field for the comparison of industrial forestry and ecoforestry

natural resources national income and economic growth in africa abstract because standard measures of aggregate income such as gross domestic product gdp do not account for natural resource depletion their use as gauges of economic performance tends to exaggerate the benefits of resource extraction accounting for natural resource depletion in 18 african countries indicates different patterns of growth than those suggested by gdp figures use of the revised measures in analyses of the link between exports and growth suggests that export expansion may generate increases in measured gdp without stimulating increased production in contrast real exchange rate alignment is correlated with growth in both conventional gdp and the revised accounts

sustainability policy and environmental policy a theoretical representative agent economy with a depletable resource stock polluting emissions and productive capital is used to contrast environmental policy which internalises externalised environmental values with sustainability policy which achieves some form of intergenerational equity the obvious environmental policy comprises an emissions tax and a resource stock subsidy each equal to the respective external cost or benefit sustainability policy comprises an incentive affecting the choice between consumption and investment and can be a consumption tax capital subsidy or investment subsidy or a combination thereof environmental policy can reduce the strength of the sustainability policy needed more specialised results are derived in a small open economy with no environmental effects on utility

welfare equivalent nnp under distributional objectives abstract this note concerns social accounting when there are social objectives for the distribution of utility across consumers the most important result is that a suboptimal distribution across agents causes the net national product to fail as a welfare measure

international migration the brain drain and poverty a cross country analysis the aim of the paper is threefold first it empirically investigates the effect of international migration on poverty in origin countries using data from a cross country analysis second it explores the specific part of the income distribution from which migrants are drawn by comparing the effect of international migration on different income quintiles of the population finally given that the selection of migrants depends not only on the income level of their households but also on the skill levels of movers the paper casts some light on the implications of the emigration of skilled workers on poverty this article shows that the stock of international migrants have a positive effect on the income of the poor while it does not have a significant impact on the income of the middle and top quintiles of the population in particular a 10 per cent increase in the per capita stock of migrants resident in oecd nations augments the income of the poor by 1 per cent on average and ceteris paribus finally the poverty reducing effect of migration holds even when the emigration process selects the best and the brightest

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

learning by doing and the introduction of new goods a dynamic general equilibrium model is developed in which goods are valued according to the characteristics they contain the set of goods produced in any period is endogenously determined and learning by doing is the force behind sustained growth it is shown that the set of produced goods changes in a systematic way over time with goods of higher quality entering each period and those of lower quality dropping out the model is then used to study the effect of introducing a traditional sector in which there is no learning

degradation of environmental capital and national accounting procedures abstract the capital theoretic approach to the environment as a wastable stock a stock with a flow of abatement services is explored in a simple ricardo like model involving wheat production and pollution production as an essential by product we then turn to how the national accounts are implicit in growth or capital theory models and how formulae emerge for accounting for the wasting of environmental capital airsheds and watersheds from excessive use

valuing mineral reserves when capacity constrains production abstract we add a capacity constraint and heterogeneous reserves to the hotelling valuation principle this produces a more general version of the principle that is more consistent with empirical valuations while retaining the underlying relationship between net price and reserve value

on the dynamics of recycling and natural resources we study the dynamic impact of recycling through its effect on the production set of the economy and its relationship with natural resources the contribution of renewable and recyclable resources for sustainability is studied although in the short run recycling may alleviate resource scarcity in the long run it is not enough to compensate for the exhaustibility of non renewable resources and the possibility of obtaining non decreasing output paths crucially depends on the extent to which production rests on renewable resources furthermore recycling interacts with natural resource growth surprisingly not always favoring sustainability the production and recycling function is a generalization of the traditional production function providing an integrated view of regular production and recycling and representing the production set of the economy when a recycling technology is available

linking economic and ecological models for a marine ecosystem increasingly economists and ecologists have begun to recognize the value to public policy of combining information and results from each discipline into multidisciplinary studies here we present a methodological approach that links economic and ecological analyses we develop an economic ecological model by merging an input output model of a coastal economy with a model of a marine food web we describe distinct linear system sub models of the economy and the ecosystem and we develop a method for linking the two our method extends the work of earlier researchers by incorporating an ecosystem matrix into resource multipliers and by showing how these multipliers may be calculated we present a numerical example for the new england region using coastal economic and marine ecological data from the region for a restricted set of industry sectors and food web trophic levels we calculate resource multipliers for the example and we simulate the economic impacts of changes in primary production in the ecosystem on final demands for fishery products the results illustrate the effects of incorporating the impacts of habitat destruction and ecosystem structure on resource multipliers our approach can be extended to incorporate the full range of sectors in the economy and trophic levels in a linked ecosystem 2003 elsevier b v all rights reserved

assessment of the performance and sustainability of mining sub soil assets for economic development in south africa abstract a natural resource accounting approach was applied in this study to evaluate the performance and sustainability of mining practices and strategies in south africa sa the study showed that except for a brief period during the 1980s rent capture was very low and almost all the resource rent from minerals dissipated to private companies recently however user costs have appeared to have been reasonably recovered by taxes and institutional royalties and the capital component of the rent user cost has fully been reinvested by mining companies while adequate reinvestment of recovered user costs in alternative forms of capital might imply sustainable management this can only hold under the assumptions of perfect substitution between human made and natural capital of the weak sustainability ws paradigm however even if one adopts ws the present analysis could not provide adequate evidence in support of the prudence of mining activities in the country this is due to a lack of adequate information on the proportions of royalties and taxes reinvested collected by the government and private landowners moreover the fact that this study does not account for the environmental impacts of mining is another important limitation on the ability of the present analysis to conclude that mineral resources have been prudently exploited in sa

social accounting and welfare measurement in a growth model with human capital this paper addresses social accounting and welfare measurement in an economy where human capital is an important factor in the economic system human capital accumulation depends on the time consumers spend in education however human capital is also a separate argument in the production function facing firms which gives rise to a production externality in a command optimum where the externality is internalized we show that an augmented nnp measure is the appropriate welfare indicator we also discuss the taxtransfer system required for the decentralized economy to reach a command optimum

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

global warming discounting is not the issue but substitutability is the cost benefit study of nordhaus 1994 is representative for the neoclassical approach towards global warming nordhaus found that no substantial emission cuts are warranted most of his critics have concentrated on the issue of discounting and demanded that a lower discount rate should be applied these criticisms first miss the point and second lead to ethically dubious inconsistent conclusions and inefficient policy choices they miss the point because the real problem of nordhaus s methodology is his implicit underlying assumption of perfect substitutability between natural and other forms of capital given the validity of this assumption lowering the rate of discount is inconsistent with current savings behaviour is ethically dubious because future generations will be much richer than the current one anyway and is inefficient because scarce financial resources are channelled into emissions abatement that exhibits rates of return far inferior to alternative public investments any call for aggressive emission abatement must therefore directly attack the perfect substitutability assumption of neoclassical economics the real disagreement is about whether consumption growth can compensate for environmental degradation caused by global warming discounting is not the issue but substitutability is

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

foreign direct investment and country specific human capital i introduction the past three decades have witnessed an unprecedented increase in foreign direct investment fdi in the world annual fdi flows from and to organisation for economic cooperation and development oecd countries have increased more than 30 fold from 1982 to 2005 while the world trade merely quadrupled during the same period the ratio of gross private capital flows to gross domestic product gdp has risen from 10 3 in 1990 to 32 4 in 2005 the ratio of fdi flows to gdp has climbed up from 2 2 in the early 1990s to 4 4 in 2005 1 as fdi gained importance in the international movement of capital a variety of theoretical and empirical studies have investigated the factors that determine fdi 2 in this article we offer an important but under studied determinant of fdi foreign educated labor in fdi host countries specifically using international bilateral data on fdi and foreign education we present empirical evidence on the role of country specific foreign educated labor in an fdi host country as a determinant of foreign direct investments production involves the process of combining physical capital and the human capital of employees human capital includes the general skills of workers but it also includes their knowledge of firm specific technology managerial skills specific to the organization and efficient communication skills with co workers consequently the labor that possesses these firm specific skills which can be readily used by a firm can be more productive in that firm than in other firms when a firm invests in a foreign country through a subsidiary that shares the technology of the parent firm the labor force that has acquired various types of human capital specific to the parent firm and thus to the subsidiary can be more productive in the foreign subsidiary for instance the local managers of a foreign subsidiary who are able to speak the same language of the managers of their parent firm or who know thoroughly well how the parent firm and its subsidiaries are organized and operated can be more productively utilized in the subsidiary firm since human capital specific to a firm and its foreign subsidiaries can be acquired through education provided in the country of the parent firm the availability of workers in a potential fdi host country who studied in the parent firm country can be an important deciding factor for a firm in investing abroad through its foreign subsidiary 3 foreign training can provide various types of country specific human capital that would increase labor productivity more in the host country of training than in other countries country specific human capital includes language capital which has been shown by numerous papers such as chiswick and miller 1993 and lazear 1999 to have considerable importance in labor market performances knowledge on firm organization and social system is another example of country specific human capital that can be acquired through foreign training foreign education can also enhance the productivity of students in firms of the host country because it provides information about the ability and potential of students in a form that can be more easily processed by firms in the host country greater knowledge regarding employees allows firms to utilize manpower more efficiently and enhance workers productivity as pointed out by becker 1993 who discusses low worker mobility across countries as evidence of the importance of country specific training earlier theoretical models in international trade such as macdougall 1960 attribute international capital movement to the difference in factor endowment measured by physical capital per worker 4 empirical findings however show that the actual capital flows fall short of the theoretical prediction that capital moves from developed economies to developing economies to take advantage of the higher rates of returns to capital

externality regulation and the monopoly firm abstract differences in strategic assumptions lead to predictable variations in the conclusions one may draw the formal theory of monopoly power and externalities reflects this variability in assumptions and conclusions this paper contains a unified model of monopoly power marketable product output and externality abatement

measuring the depreciation of australia s non renewable resources a cautionary tale abstract the pursuit of sustainability is widely seen as requiring the calculation and publication of environmentally adjusted measures of national income and or of economic indicators intended to show whether or not economic behaviour is consistent with sustainability requirements in either case a measure of natural resource depreciation is needed the paper restricts its attention to non renewable mineral resources and measures their depreciation in australia according to different methods proposed in the literature using data published by the australian bureau of statistics the different methods are found to yield strikingly different results the conclusion is that robust measurement of natural resource depreciation is unlikely and that results appertaining to such should be treated sceptically

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

knowledge based growth abstract this paper presents a model displaying sustained growth in output resulting from the accumulation of knowledge the accumulation of knowledge is endogenous determined by a level of study chosen by optimizing agents although knowledge can be owned and sold its equilibrium price is below its value to future production implying that the equilibrium suffers from a paretononoptimal underaccumulation of knowledge these features of the equilibrium result from two special properties of knowledge i an agent s stock of knowledge is undiminished by the transmission of that knowledge to someone else and ii the transmission of knowledge cannot be fully observed

accounting for india s forest wealth in this paper we account for forest wealth in india changes in the timber and carbon wealth embodied in these forests are related to important green national accounting aggregates such as genuine saving and the change in wealth per capita important accounting issues include the timing of carbon releases that occur when forests are disturbed as well as the valuation of these releases our empirical findings suggest that while india s forest wealth is substantial net changes in this wealth are arguably not so large at least in relation to gnp however when viewed in the context of the wealth diluting effects of population growth this implies a far larger additional savings effort is required to cover the net loss in forest values than otherwise appears to be the case finally we examine ways in which the accounting approach that we adopt can be reconciled with approaches which stress conserving forest wealth

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

aggregate estimate of environmental degradation for zimbabwe does sustainable national income ensure sustainability abstract standard measures of economic growth do not adequately reflect changes in aggregate welfare over time sustainable national income is therefore defined as net national product with adjustments for the degradation of renewable and non renewable capital productivity loss rather than replacement cost is the most theoretically correct way to value resource depletion modified net product is estimated for the agriculture and forestry sectors of zimbabwe by valuing the loss of forest stock and soil erosion the results show that traditional measures overstate the value of the agricultural sector s product by approximately 10 in 1989 it is argued that indicators of sustainable national income do not ensure sustainable development as with all macroeconomic indicators they do not account for distributional and equity issues which are at the crux of sustainable development nor do they point to mechanisms that would ensure sustainable resource management rising sustainable income over time is therefore a necessary but not sufficient condition for the achievement of sustainable development

a theory of on the job learning in this paper the author assumes that a junior worker learns on the job from senior workers the worker s earnings are equal to his value of marginal product minus the tuition to his senior workers plus the teaching reward from his junior workers the slope of the experience earnings profile decreases with the employment growth rate the earnings of an inexperienced worker of an unusually large cohort tend to be higher than the normal level finally the author shows that his model generates an age earnings profile which is increasing concave in age and declining near to retirement copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

finite lifetimes and growth abstract in this paper we study the long run growth property of overlapping generations models it is shown that in one sector models with convex technologies the asymptotic growth rate must be zero this results because the young do not have sufficient income to purchase a large capital stock thus a policy of income redistribution to the young can generate growth even if financed by income taxation additionaly it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth

discount rates natural resources and the measurement of aggregate economic growth in africa abstract over the last decade there has been a growing interest in depreciation of natural capital in national income accounts within this literature there has been limited discussion of the sensitivity of measurement to the choice of discount rate and the effect of using depreciated measures of growth in empirical analyses without attempting to estimate or justify a specific discount rate this paper presents alternative sets of growth data for 18 african countries based on different assumptions of the appropriate discount rate to apply to natural capital the data sets are then used in a statistical test of the causes of economic growth results of the statistical analysis indicate sensitivity to the choice of discount rate

the welfare economic theory of green national accounts this paper takes a critical look at the literature on green national accounts the problem studied is to find a linear index of economic variables that responds to perturbations in the same direction as social well being the thesis of a large literature that net national product which is a flow is that index in closed economies is shown in some interpretations to be simply false and in others to suffer from deep estimation problems it is argued that capital depreciation using shadow prices should certainly be included in national accounts but that the right welfare index is a comprehensive measure of wealth defined as the shadow value of an economy s stock of all capital assets it is shown that comprehensive wealth is usable as a criterion for policy evaluation as well as for determining sustainable economic development

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

democracy and foreign education despite the large amount of private and public resources spent on foreign edu cation there is no systematic evidence that foreign educated individuals foster democracy in their home countries using a unique panel dataset on foreign stu dents starting in the 1950s i show that foreign educated individuals promote democracy in their home country but only if the foreign education is acquired in democratic countries the results are robust to several estimation techniques to different definitions of democracy and to the inclusion of a variety of control variables including democracy in trading partners neighboring countries level of income and level and stock of education jel d72 121 015 do foreign educated individuals play a role in fostering democracy in their home countries despite the large amount of resources spent on financing foreign education there is no systematic study on the effects of foreign education on democracy this paper fills this gap using a dataset on foreign students that includes almost all host and sending countries and spans over 50 years numerous policy initiatives and large investment in the united states are based on the notion that foreign educated students promote democracy in their countries of origin through the fulbright program the us government has financed more than 158 000 foreigners studying in the united states 1 the us government not only finances the education of foreign students but also annually issues more than 250 000 nonimmigrant visas for foreign students more than five million individuals have received visas to study in the united states since 1971 2 us efforts to educate foreign students have produced impressive results 46 current and 165 former heads of governments are products of us higher education foreign leaders educated in the united

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

social accounting and the public sector this article contributes to the theory of social accounting as such it tries to extend earlier literature on the welfare equivalence of the comprehensive net national product in two main directions both of which refer to the public sector one is by considering welfare measurement problems associated with public good provision and redistributive policy respectively when the public revenues are raised by distortionary taxes the other is by addressing the consequences of a federation like decision structure where independent tax and expenditure decisions are made both by the central government and by lower level governments

dollars and performance treating alcohol misuse in maine abstract if public funds are allocated efficiently then an increase in funding should improve the performance of substance abuse treatment programs in the data used in this paper performance measured as abstinence rates and expenditures per patient are not positively correlated one explanation is that funding is endogeneous i e programs treating more difficult patients receive more funding the data comes from all maine s outpatient drug free programs that received public funding between 1991 and 1994 after controlling for endogeneity this paper concludes that the marginal impact of expenditures per patient on abstinence rates is small and statistically insignificantly different from zero

comparing augmented sustainability measures for scotland is there a mismatch we estimate and compare two empirical measures of the weak sustainability of an economy for the first time the change in augmented green net national product gnnp and the interest on augmented genuine savings gs yearly calculations are given for each measure for scotland during 1992 1999 augmentation means including using projections to 2020 changed production possibilities enabled by exogenous technical progress or changing oil prices the change in augmented gnnp and the interest on augmented gs are both always positive showing no sustainability problem for scotland then according to the assumptions underlying our weak sustainability calculations however the former greatly exceeds the latter even when macroeconomic fluctuations are taken into account this is a mismatch which poses an unresolved problem with the theory resolving it may require respecifying the utility functions used in mainstream growth theory

a general approach to welfare measurement through national income accounting a framework is developed for analyzing national income accounting using a revealed welfare approach that is sufficiently general to cover both the standard discounted utilitarian and maximin criteria as special cases we show that the basic welfare properties of comprehensive national income accounting previously ascribed only to the discounted utilitarian case extend to this more general framework in particular under a wider range of circumstances it holds that real nnp growth or equivalently a positive value of net investments indicates welfare improvement we illustrate the applicability of our approach in the dasgupta heal solow model of capital accumulation and resource depletion

green accounting in imperfect market economies the idea of measuring the national welfare level by using the green nnp net national product has gained much attention lately this paper summarizes the research on social accounting in imperfect market economies by putting the results into a unified framework the main contribution of the paper is to relate the form of the national welfare measure to the functioning of the economic system and therefore to explicitly address the informational requirements implicit in social accounting

economic analysis of foreign education and students abroad abstract the role of knowledge accumulation in economic growth has been well discussed in the literature by assuming the possibility of knowledge import by study abroad this paper presents a growth model of knowledge creation and import this paper also derives testable implications in three aspects of foreign education the choice of host countries by foreign students the number of students abroad from one origin country and the growth effect of foreign education in all these aspects empirical observations agree well with the predictions of the model

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

national account of timber and forest environmental resources in sweden this paper outlines an extension of the national account of income from forest resources in sweden 1987 incorporating changes in timber inventories production of nonmarketed timber and nontimber goods and depletion or improvement in vital environmental stocks such as soil nutrients biodiversity and carbon sinks the total net value added provided by forest resources and forestry labour 1987 is estimated to 22 billions sek this is one third more than the contribution of forestry to ordinary gnp

deforestation and national accounting we construct a first best growing economy in which land is being switched continuously from use in forestry to an alternative use we find that implicitly for such activity to take place there must be no net loss to land owners this implies no deduction in the national accounts for deforestation with soil erosion on deforested land pigovian taxes must be levied to sustain a first best we also observe an optimal tax on households for their implicit use of forests as oxygenation sinks

measuringincome and measuring sustainability we examine what interpretation can be given to inclusive income understood to be consumption plus the value of the net increase in all relevant capital stocks we introduce the concept of instantaneously constant value income defined as the maximum amount the economy can consume at a moment of time and keep the expected present value of utility of current and future generations constant we argue that this income concept captures some of the concerns underlying sustainability our main result is that inclusive income equals instantaneously constant value income we show that this result holds in a very general setting and in particular carries over to models incorporating technological progress when such progress can be captured by augmented stocks of knowledge an important implication of our main result is that it provides a very simple method for deriving inclusive income which does not involve any linearization of the hamiltonian

an operative framework for total hicksian income measurement application to a multiple use forest a methodology for estimating total hicksian income in multiple use forests is presented the approach consistently incorporates commercial as well as non commercial economic values and enables the measurement of national accounting aggregates taking into account variation in man made and natural capital innovative solutions are developed i for the estimation of non market values such as recreation where an attempt to determine exchange values has been made simulating markets ii for timber where standing timber valuation methods have been extended to cover uneven stands and iii for carbon fixation valuation where only permanently fixed carbon after 1990 has been taken into account the methodology is applied to a multiple use pinewood in the guadarrama mountains near madrid spain timber cattle grazing hunting recreation carbon fixation and conservation values are measured and integrated in the accounting system using primary microeconomic data from the case study results indicate the importance of non commercial income which accounts for 51 of the total income and the social relevance of the analysed forest implying that only 31 of the total income generated is appropriated by the forest owner

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

the capital gains from trade are not enough evidence from the environmental accounts of venezuela and mexico abstract in principle a country cannot endure negative genuine savings for long periods of time without experiencing declining consumption nevertheless theoreticians envisage two alternatives to explain how an exporter of non renewable natural resources could experience permanent negative genuine savings and still ensure sustainability the first one alleges that the capital gains arising from the expected improvement in the terms of trade would suffice to compensate for the negative savings of the resource exporter the second alternative points at technological change as a way to avoid economic collapse this paper uses the data of venezuela and mexico to empirically test the first of these two hypotheses the results presented here prove that the terms of trade do not suffice to compensate the depletion of oil reserves in these two open economies

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

anomalies in green national accounting we extend standard arguments for greening the product side of the national accounts to the income side of the accounts and turn up an anomaly for an economy with oil use no entry for oil income a supposed primary factor appears in the income side of the national accounts when the depletion of natural capital is accounted for on the product side of the accounts we resolve this issue by applying an income definition developed in the theory of national accounting this however leads to another anomaly on the income side of the national accounts

on the role of green taxes in social accounting this paper addresses social accounting numerically in a dynamic generalequilibrium model the main purposes are to study i whether emissiontaxes based on static willingness to pay information can be used to improvethe welfare level and ii whether these taxes provide close enoughapproximations of the correct pigouvian emission tax to be useful in thecontext of social accounting the results indicate that if environmentalquality is relatively linear with respect to pollution the approximation ofthe pigouvian emission tax will bring the economy close to the sociallyoptimal solution and at the same time provide a close approximation of thevalue of net investments in environmental capital

the environment as a commodity all economic activity is based ultimately on re sources found in nature whether it is consumption the point in exposing the morphology of produced or production or whether it is exchange the comgoods and services is not to construct a resource moditi es which are involved are made of constitutheory of a value there are any number of natural ents provided by nature thus the ingredients of resources and this alone precludes such an at any manufactured good are other produced goods tempted theory from being coherent my purpose labour time and skills and natural resources each rather is to use it to express surprise at the fact that of these constituent produced goods is in turn made despite the centrality of natural resources in eco up from the ingredients that went into its manufacnomic activity they find little room in economics ture namely labour time and skills natural rediscourses interest in resource economics more sources and further produced goods it follows particularly environmental economics has only that any manufactured commodity is ultimately a been intermittent and if we are currently witness combination of labour and natural resources ing a resurgence and this special issue is an ex ample of it we have also just lived through a labour too is a produced good even raw labour is decade long neglect during which much valuable an output manufactured by those natural resources research could have been done 2 we are way behind which sustain life resources such as the multitude where we should have been and could have been

the division of labor coordination costs and knowledge this paper considers specialization and the division of labor a more extensive division of labor raises productivity because returns to the time spent on tasks are usually greater to workers who concentrate on a narrower range of skills the traditional discussion of the division of labor emphasizes the limitations to specialization imposed by the extent of the market we claim that the degree of specialization is more often determined by other considerations especially emphasized are various costs of coordinating specialized workers who perform complementary tasks and the amount of general knowledge available