_PK_ is the Produced Capital, defined as the accumulation of investment series (i.e. gross fixed capital formation, GFCF<sup>52</sup> ), accounting for depreciation of capital. In other words, produced capital can be regarded as the sum of physical capital and urban land<sup>53</sup> .

_NFAs_ are the Net Foreign Assets, calculated as total value of the assets that the country detains abroad minus the value of the domestic assets owned by foreigners. The figures that this paper used for NFAs are contained in the External Wealth of Nations Mark II database<sup>54</sup> .

_TW_ is the Total Wealth, to be regarded as the present value of future consumption which is sustainable, discounted at a rate of time preference, over the time of a generation. _TW_ is calculated by converting final consumption expenditure from local currency units to US$ and subtracting the Adjusted Net Savings (ANS) figure – if that is negative – in order to obtain a sustainable consumption figure; then current prices are converted to constant using the USD GDP deflator, and finally the latest five year average of consumption (2008-2012, in constant prices) is taken into account as a basis for the calculation of the net present value of consumption over the 25 year period<sup>55</sup> .

_IK_ is the Intangible Capital, and it is calculated as a residual.

On the one hand this methodology allows us to estimate quantitatively the stock of wealth of a nation, and, more in detail, to provide a sectoral decomposition of this wealth. This outcome may be highly useful in contributing to the identification of priority sectors, and may support policy makers orienting longer term growth, investment, labor policies, among others. On the other hand, the methodology provides a proxy to estimate depletion for each sector<sup>56</sup> . As a consequence, the calculation of such depletion for each sector (e.g. energy, mineral) allow to compute an updated adjustment (for 2013) to the standard saving measure of Gross National Savings (GNS), which corresponds to the Adjusted Net Savings (ANS) or genuine savings.

ANS is a concise indicator of the sustainability of the country’s investment and growth long term policies. The measures of savings traditionally utilized in the national accounts balance sheets do not reflect realistic changes in the broader evolution of resources’ stocks. Quoting Joseph Stiglitz: “GDP tells you nothing about sustainability. [...] No one would look just at a firm's revenues to assess how well it was doing. Far more

> 52 GFCF typically comprises all domestic investment on land improvements, roads, plants, machinery, buildings, the technology in use and infrastructure. GFCF does not distinguish between different types of capital expenditure nor their different depreciation rates.

> 53 According to the methodology in The Changing Wealth of Nations: Measuring Sustainable Development for the New Millennium (World Bank, 2011) this paper assumed an annual rate of capital depreciation equivalent to 5 percent, and a value for urban land at 24 percent of physical capital across all countries.

> 54 Cf. Lane and Milesi-Ferretti, 2007; database online available at http://www.philiplane.org/EWN.html

> 55 The discount rate assumed is equivalent to 1.5 percent

> 56 For a detailed description of the methodology, please refer to: The Changing Wealth of Nations, The World Bank, 2010

25