beyond gdp the quest for a measure of social welfare this paper critically examines the various approaches to the measurement of individual well being and social welfare that have been considered for the construction of alternatives to gdp special attention is devoted to recent developments in the analysis of sustainability in the study of happiness in the theory of social choice and fair allocation and in the capability approach it is suggested in the conclusion that although convergence toward a consensual approach is not impossible for the moment not one but three alternatives to gdp are worth developing jel i31 e23 e01

time series based tests of the convergence hypothesis some positive results abstract using time series based tests proposed by bernard and durlauf 1996 and annual time series data 1900 1987 on several oecd countries the paper identifies bivariate convergence between belgium and the netherlands france and italy australia and the united kingdom and sweden and denmark

application and use of the isew for assessing the sustainability of a regional system a case study in italy abstract the index of sustainable economic welfare isew was introduced by daly and cobb in 1989 in order to integrate the information embodied in gdp since economic growth implies externalities and market failures and a portion of it can be defined as uneconomic the isew method introduces some corrections and adjustments to the gdp calculation framework the isew has been calculated for a number of nations but it has been rarely applied to sub national systems its calculation at the local level is important especially in case of administrative decentralization and autonomy and responsibility of local authorities in certain fields for this reason a more and more comprehensive knowledge of the characteristics and peculiarities of the territorial system they manage is necessary this paper presents the results of the isew calculation for tuscany a region in central italy in the period 1971 2006 this is one of the few attempts to apply the isew in time series at the regional level final results show that a discrepancy between isew and gdp appeared in the 1970s social and environmental pressures increased during the period under study making the gap equal to about 30 percent of regional gdp in 2006 the isew can be used also as a tool for evaluating policies but further adjustments in calculation of certain items are considered necessary for taking into account and evaluating punctual policies a case of energy policy is presented

testing convergence in economic growth for oecd countries this article explores tests for absolute convergence in economic activity among a set of countries it proposes a new test procedure that allows the researcher to identify particular countries within the group which might not be converging it also proposes that convergence among a set of similar countries is better thought of as movement toward a group leader rather than movement towards a group mean applying the new procedure to 22 oecd countries it finds strong evidence for absolute convergence for the vast majority of countries towards their common steady state level this article also points out why using standard unit root or cointegration tests with bernard and durlauf s definition of convergence is inappropriate

foreign exchange market efficiency and cointegration in this note we examine an implication of the cointegration literature for the efficiency of foreign exchange markets in particular if foreign exchange markets are efficient then two spot exchange rates cannot be cointegrated this proposition is tested for 10 dollar bilateral exchange rates over the period january 1973 december 1985

testing for catching up periods in time series convergence abstract a time series test procedure related to the question of catching up or periods characterized by different rates of convergence is introduced based on 1950 2000 data for real gdp per capita the majority of 20 oecd countries are found to catch up and converge towards the usa

economic openness and green gdp since the early 1990s there have been several attempts to develop national income accounting systems which recognize the negative impacts of environmental degradation and income inequalities on economic welfare collectively these bgreenq gross domestic product gdp studies have generated a wealth of new time series data sets which can be used to reexamine the links between gdp and a host of factors commonly included in traditional economic growth models in this paper we develop models of green gdp growth and the gap between traditional and green gdp by using a panel data set from eight countries spanning 30 50 years in both the growth and gap models the effects of economic openness are tested we find strong and robust results suggesting a negative nonlinear correlation between openness and green gdp growth and a positive nonlinear correlation between openness and growth of the gap between traditional and green gdp while green gdp accounting systems are still in their infancy our paper nonetheless implies that once these more comprehensive measures are fully developed empirical models which explore factors contributing to the growth of economic welfare over time should be reexamined d 2005 elsevier b v all rights reserved

an examination of the robustness of the weekend effect this paper analyzes the robustness of the day of the week dow and weekend effects to alternative estimation and testing procedures the results show that sample size can distort the interpretation of classical test statistics unless the significance level is adjusted down ward specification tests reveal widespread departures from ols assumptions hypothe sis tests results are reported using robust econometric methods and a garch model the strength of the dow and weekend effect evidence appears to depend on the estimation and testing method both effects seem to have disappeared by 1975

convergence or divergence in latin america a time series analysis this article investigates the occurrence of per capita income convergence in 19 latin american countries we apply a time series approach to test for stochastic convergence and convergence based on structural breaks unit root tests where the dates of breaks are unknown and determined endogenously this approach is essential since it does not impose common break dates and parameter homogeneity among countries in fact the econometric methodology employed attempts to provide what was lacking in previous works as a consequence unlike prior studies the results indicate that there is substantial evidence in favor of conditional convergence in latin america we show that this evidence is even greater when analyzing south and central america separately

a theoretical foundation to support the index of sustainable economic welfare isew genuine progress indicator gpi and other related indexes abstract for some time now ecological economists have been putting forward a threshold hypothesis the notion that when macroeconomic systems expand beyond a certain size the additional cost of growth exceeds the flow of additional benefits in order to support their belief ecological economists have developed a number of similar indexes to measure and compare the benefits and costs of growth e g the index of sustainable economic welfare isew and the genuine progress indicator gpi in virtually every instance where an index of this type has been calculated for a particular country the movement of the index appears to reinforce the existence of the threshold hypothesis of late a number of observers have cast doubt over the validity of these alternative indexes one of the concerns commonly expressed is the supposed lack of a theoretical foundation to support the isew the gpi and other related indexes by adopting a concept of income and capital outlined by fisher nature of capital and income a m kelly new york 1906 this paper demonstrates that these alternative indexes are theoretically sound but in order to be broadly accepted require the continuous development of more robust valuation methods

estimating the genuine progress indicator gpi for brazil from 1970 to 2010 this paper estimates the genuine progress indicator gpi for brazil from 1970 to 2010 as an alternative indicator to the gross domestic product gdp after a growing disparity between these two indicators in the 1980s when brazil s per capita gpi featured a 35 decline there was a relative catch up in per capita gpi but not one sufficiently strong enough to reduce the historical gpi gdp gap the recent trend of rapidly increasing environmental and social costs along with the decline in unpaid labour and infrastructure services poses concerns about the sustainability of an increasing gpi for brazil into the future policies aimed at reducing environmental costs are necessary if brazil is to enjoy a sustainable pattern of non declining economic welfare brazil must pursue a higher rate of productivity in material and energy consumption in order to keep environmental pressures to a minimum level

a note on cointegration and international capital market efficiency abstract in a recent paper in the jimf crowder 1994 claims that evidence that spot exchange rates are cointegrated and forward premiums are non stationary implies international capital markets are not efficient this note argues that the cointegration properties of spot exchange rates are independent of the efficiency or inefficiency of financial markets

genuine progress indicator 2 0 pilot accounts for the us maryland and city of baltimore 2012 2014 abstract for over thirty years the genuine progress indicator gpi has been used to evaluate economic performance quantify benefits and costs of growth and predict effects of policy changes on economic wellbeing the popularity and use of the metric is increasing partially in response to new global demands for metrics that go beyond gross domestic product gdp however because the basic gpi accounting protocols have yet to be consistently updated to respond to theoretical critiques new valuation methods and new data sources a proliferation of studies at the global national and sub national level contain widely divergent methodologies because of this gpi practitioners have called for a new consistent framework to guide future gpi studies gpi 2 0 this paper is an attempt to operationalize some of the concepts that have emerged from gpi 2 0 deliberations online and at recent workshops in the form of gpi 2 0 pilot accounts for the us state of maryland and city of baltimore the goal is to demonstrate the feasibility of multi scale gpi accounts that provide a more accurate measure of current economic welfare than gdp and that incorporate new methods and sources of information to replace many of the outdated aspects of the prevailing gpi approach

australia s genuine progress indicator revisited 1962 2013 abstract the genuine progress indicator gpi has been proposed as an alternative to gdp as an indicator of national progress gpi includes 26 components that adjust gdp for inequality include household and volunteer work and subtract a number of social and environmental costs best seen as negatives the gpi has been estimated for over 20 countries and many states and territories this paper updates australia s gpi to determine whether australia as a nation has progressed overall since the 1960s and compares two alternative approaches that differ in some important details we find that despite these differing approaches we find that gpi remained largely stagnant from the 1960s through to the 1990s and only at the turn of the century has gpi started to increase despite increasing negative environmental costs while gpi is well placed to serve as an improved australian and global measure of national progress further work is needed to measure national well being and support its integration into political decision making and to include the full range of subjective and objective indicators ultimately this paper argues that while gpi is well placed to serve as a new australian and global measure of well being we stress the need for an alternative indicator like gpi to supplement gdp and to better inform policy decisions

the foreign exchange market efficiency hypothesis revisiting the puzzle abstract the engle granger bivariate strong form and the johansen juselius multivariate weak form cointegration tests are performed between the spot and forward rate series over multiple horizons to test the market efficiency hypothesis meh

cointegration based tests of daily foreign exchange market efficiency abstract an immediate implication of cointegration is the existence of granger causal orderings among cointegrated series this implies that asset prices determined in a weakly efficient market cannot be cointegrated this proposition is tested using daily data for 18 foreign currencies tests are conducted for both pairwise combinations of currencies and higher order systems no significant evidence of cointegration among exchange rates is found

measuring sustainability a time series of alternative indicators for scotland this paper presents results from a time series analysis of seven alternative measures of sustainability for scotland the measures chosen are green net national product genuine savings ecological footprint environmental space net primary productivity the index of sustainable economic welfare and the genuine progress indicator these are all measures at the national or macro level we note arguments in the literature that no one single measure of sustainability is likely to be sufficient however very different messages concerning the sustainability of scotland over the period in question 1980 1993 emerge from these measures chosen we also argue that different indicators provide different insights for policy making

beyond gdp measuring and achieving global genuine progress article i nfo while global gross domestic product gdp has increased more than three fold since 1950 economic wel fare as estimated by the genuine progress indicator gpi has actually decreased since 1978 we synthesized estimates of gpi over the 1950 2003 time period for 17 countries for which gpi has been estimated these 17 countries contain 53 of the global population and 59 of the global gdp we compared gpi with gross domestic product gdp human development index hdi ecological footprint biocapacity gini coefficient and life satisfaction scores results show a significant variation among these countries but some major trends we also estimated a global gpi capita over the 1950 2003 period global gpi capita peaked in 1978 about the same time that global ecological footprint exceeded global biocapacity life satisfaction in almost all countries has also not improved significantly since 1975 globally gpi capita does not increase beyond a gdp capita of around 7000 capita if we distributed income more equitably around the planet the current world gdp 67 trillion yr could support 9 6 billion people at 7000 capita while gpi is not the perfect economic welfare indicator it is a far better approximation than gdp development policies need to shift to better account for real welfare and not merely gdp growth

are foreign exchange markets really efficient asset prices determined in a weakly efficient market cannot be cointegrated because cointegration implies a granger causal link however strong evidence of cointegration in currency markets is found using johansen s multivariate procedure on london daily closing rates for the six major currencies in dollar terms an error correction based trading model is implemented

a conceptual exploration and critical inquiry into the theoretical foundation s of economic welfare measures abstract economic welfare measures ewm such as the isew and the gpi are often argued to lack a sound theoretical foundation however we observe that the initial ewm were jointly inspired by hicksian and fisherian income welfare s experiential nature is fisherian inspired whereas seeing the consumption of community capital e g the ecosystem as a cost is hicksian inspired as most scholars do not recognize this double theoretical foundation two distinct welfare interpretations with different time and boundary dimensions are often conflated ewm can be seen as either capturing the benefits and costs experienced or as reflecting the benefits and costs of present economic activities bcpa the former interpretation excludes future costs costs shifted abroad and capital changes as they are not experienced in the present while the latter includes them recent developments reveal that ewm are converging toward the ex post established experiential fisherian foundation formulated by lawn 2003 yet this is not the only way forward as the bcpa view offers an alternative to account for for instance the costs of present activities shifted abroad or to the future whether they are experienced or not to avoid inconsistencies ewm s standardization would greatly benefit from making explicit in future studies which interpretation is taken

estimates of the genuine progress indicator gpi for oregon from 1960 2010 and recommendations for a comprehensive shareholder s report abstract the genuine progress indicator gpi is a significantly more comprehensive approach to assessing economic progress than conventional measures such as gross domestic product gdp we estimated the gpi for the state of oregon from 1960 2010 we found that it tracked the gross state product gsp for the period 1970 2000 but began to diverge and flatten out in 2000 the major reasons for this divergence were increasing inequality loss of farmland and decreasing personal consumption expenditures as a fraction of gsp oregon gpi per capita leveled off in 2000 while the us gpi capita leveled off in 1975 the gpi is not the perfect indicator of economic and social well being but it is a better approximation than gdp as more states and countries begin to recognize the inappropriateness of gdp as a policy goal we can expect to see much more emphasis on and use of alternative indicators like gpi we recommend extending these indicators to include a comprehensive shareholder s report that reflects all the state s capital assets including built human social and natural capital

measuring development with inequality how should aggregate indicators of development account for inequality abstract the paper analyzes how inequality is accounted for in aggregate indicators of development and whether and how it should be used the motivation behind the study stems from the renewed interest in inequality in academia public discourse and in global policy first we argue that inequality should be considered when constructing development indicators the role of distribution in development is important both because people generally prefer lower inequality and inequality tends to have negative effects on development outcomes second we analyze how ten selected development indicators account for inequality in terms of justification type of inequality measure of inequality and method of incorporation and what the strengths and weaknesses of different approaches are we found considerable diversity especially for inequality measures and methods of incorporation as for the type of inequality inequality of opportunities is considered marginally and overlapping inequalities not at all increasing data availability opens the door for inclusion especially for the latter aspect as most indicators suffer from insufficient methodological substantiation we argue for increased clarity regarding why and how inequality is accounted for in development indicators the analysis is complemented by a detailed review of treatment of inequality by the analyzed indicators annex

a summary of isew and gpi studies at multiple scales and new estimates for baltimore city baltimore county and the state of maryland this paper 1 summarizes a number of previous index of sustainable economic welfare isew and genuine progress indicator gpi studies at various scales 2 estimates the gpi for baltimore baltimore county and the state of maryland and 3 compares these results with previous and parallel studies gpi incorporates environmental social and economic information into a single metric to represent economic well being at all three scales gpi was found to grow at a slower rate than the conventional economic measure of gross domestic product gdp while at the us national scale gpi has been relatively flat since 1975 state level results match an independently calculated maryland gpi confirming that gpi methods are robust and reproducible in addition the state of maryland has recently made gpi one of their official state statistics reported annually state level gpi results were also compared with studies for the states of ohio and vermont to explore regional differences we recommend that the gpi research community develop consensus on a standardized measurement approach and seek common ground for advancing the use of improved indicators and accounting systems in official policy settings

testing the hypothesis of market efficiency in the taiwan us forward exchange market since 1990 this article examines the applicability of the hypothesis of market efficiency in taiwan s foreign exchange market using daily data instead of linear regression based models we consider the possibility that the true data generating process may come from two different distributions and we employ the markov switching approach to analyse this from the results of the two state markov switching model we define state 1 as the efficient state and state 2 as the inefficient one only the 30 day forward rate is able to differentiate between the two states based on the unconditional probabilities from the markov switching model we also find that the 30 day forward rate has a 70 probability in the efficient state which indicates that 70 of all speculators fully extract information when predicting future spot rates while 30 of all investors do not

economic growth quality environmental sustainability and social welfare in china provincial assessment based on genuine progress indicator gpi abstract in order to devise scientific and sustainable development strategy it is vital to assess the quality of economic growth as a useful complement to traditional economic indicators gpi s most reputed virtue is its great improvement in evaluating environmental and social costs in this paper we estimate the gpi for all 31 provinces in mainland china from 1997 to 2016 gpi estimation is highly sensitive to income inequality climate change damage and depletion of non renewables we address contestable methodological assumptions associated with the three items which have been usually ignored in empirical studies we use the atkinson index in place of the gini index as a measure of income inequality we avoid the problematic duplicated counting of climate change damage and the unjustified cost escalation factor in depletion of non renewables our results show that first gpi per capita has recently declined in some provinces unveiling a threat to social welfare and sustainability second the relative threshold effect the progress of social welfare promotion is slower than the expansion of economic scale has been found in many provinces third resource consumption and environmental pollution especially water pollution and carbon emissions would generate substantial welfare losses

does comovement among exchange rates imply market inefficiency abstract this paper argues that contrary to what has been reported in the empirical literature previously cointegration between pairs of exchange rates does not necessarily rule out informational efficiency in currency markets the basic reason is that market efficiency does not rule out predictable exchange rate movements but only rules out arbitrage opportunities from predictable exchange rate movements as the usual parity conditions dictate

the sustainable development consequences of imf debt vs capital control comparing progress in gpi and gdp terms for korea and malaysia abstract the panic wrought by the 1997 asian financial crisis spurred different mitigative measures some states assented to imf bailout and restructuring while others enforced capital control since then despite intense academic and regulatory scrutiny of the nuances of the recession empiric focus on recovery trajectory of affected countries centred chiefly around traditional gdp metrics an approach that disregards economic performance in a manner congruent with sustainable development goals sdg in this paper we adopt a broader sdg compatible approach by tracking two affected countries korea and malaysia recovery via operationalizing an alternative growth indicator gpi genuine progress indicator first we construct a 35 year long gpi index from 1980 to 2014 and employ the solow growth model to measure the impact of the two remedial measures on gdp and gpi of both countries employing an ardl approach we find external debt to impact significantly the gdp and gpi of korea meanwhile for malaysia the controversial capital control failed to register significant impact moreover unemployment rates trade openness fixed capital formation and the history of previous crises are found to be influential determinants of gdp and gpi with credit and exchange rate variables showing ambiguous results

do the spanish regions converge a unit root analysis for the hdi of the spanish regions this article studies the possible stochastic convergence between the spanish regions in 1980 2010 the application of unit root techniques to the new human development index recently calculated in herrero et al 2013 allows us to show that the evolution of the spanish economy can be better understood as the sum of divergent forces rather than as a group of convergent regions similar conclusions can be drawn when the per capita gdp is used although these two variables exhibit different patterns of behaviour at the end of the sample finally we also observe that the distance between northern and southern regions has increased since 2000

on the methodology of isew gpi and related measures some constructive suggestions and some doubt on the threshold hypothesis existing country studies of the index of sustainable economic welfare isew the genuine progress indicator gpi and related measures while sharing the same basic methodological approach differ with respect to the valuation of important items this paper provides a critical but constructive discussion of the various methods used for the valuation of non renewable resource depletion and long term environmental damage and for the weighting of consumption expenditures for income inequalities several recommendations are given on how to improve the methodology for future updates of existing studies or for the construction of new measures sensitivity analysis shows that if these recommendations are followed for the valuation of resource depletion and long term environmental damage then the so called threshold hypothesis which seems to have gained empirical support from all studies undertaken so far fails to materialise this suggests that as far as factors related to the environment are concerned the widening gap between isew and gpi on the one hand and gross national product gnp on the other might be an artefact of highly contestable methodological assumptions 2000 elsevier science b v all rights reserved

willingness to pay and policy instrument choice for climate change policy in the united states abstract this paper provides the first willingness to pay wtp estimates in support of a national climate change policy that are comparable with the costs of actual legislative efforts in the u s congress based on a survey of 2034 american adults we find that households are on average willing to pay between 79 and 89 per year in support of reducing domestic greenhouse gas ghg emissions 17 by 2020 even very conservative estimates yield an average wtp at or above 60 per year taking advantage of randomized treatments within the survey valuation question we find that mean wtp does not vary substantially among the policy instruments of a cap and trade program a carbon tax or a ghg regulation but there are differences in the sociodemographic characteristics of those willing to pay across policy instruments greater education always increases wtp older individuals have a lower wtp for a carbon tax and a ghg regulation while greater household income increases wtp for these same two policy instruments republicans along with those indicating no political party affiliation have a significantly lower wtp regardless of the policy instrument but many of these differences are no longer evident after controlling for respondent opinions about whether global warming is actually happening

design and meaning of the genuine progress indicator a statistical analysis of the u s fifty state model abstract the genuine progress indicator gpi was designed to reveal the trade offs between costs and benefits of economic growth although originally estimated and contrasted with gross domestic product gdp at national scales an interest in a state level adoption has developed in the united states to inform and guide policy as gpi scholarship and a community of practice has developed questions have arisen about the quality and legitimacy of the gpi to investigate we apply a composite indicator analysis developed by the organization for economic co operation and development oecd to fifty us state gpi estimates using a consistent method we focus on a multi variate analysis of the structure of the composite sensitivity to weighting and aggregation assumptions and the statistical relationship with other well being indicators results are heavily influenced by a small number of components point to a number of unintended policy outcomes and have mixed relationships with allied indicators the study suggests steps towards shared gpi governance among practitioners and researchers consideration of data parsimony and potential double counting and data selection criteria to help fill gaps prioritize needs and better articulate the purpose and meaning of gpi

option valuation with co integrated asset prices abstract this paper investigates theoretical and practical aspects of options that are based upon two or more assets which are co integrated for this purpose a new discrete time model of asset prices is developed a model featuring both the co integration property as well as stochastic volatilities using a garch equilibrium based option pricing approach it is shown that when volatilities are deterministic the option prices do not depend on the co integration parameters except for the mis specification effect as to the manner in which the volatilities are estimated however with stochastic volatilities the option prices explicitly depend upon the co integration parameters in order to understand these results better this paper also examines a continuous time diffusion limit of the asset price system and empirically studies the co integration effect using spread options based upon the s p500 and the nasdaq100 these numerical results suggest that consideration of co integration can substantially alter the value delta and vega of a spread option