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Income and the Hamiltonian

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Author Info
Usher, Dan

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Abstract

Among the many interpretations of real national income are (1) the return to national wealth and (2) the Hamiltonian of an appropriately-chosen dynamic model of the economy. These interpretations are sometiems alleged to be equivalent and to constitute the self-evidently ideal definition to which statistics of real national income should conform as closely as possible., The allegation is correct on some very restrictive assumptions about technology and taste. Otherwise, these interpretations are inconsistent, inexpedient as definitions of real national income and significantly at variance with the usage in the national accounts. The return to wealth is unmeasurable with the currently-available data. The Hamiltonian is typically in the wrong units. It is an accurate reflection of neither productive capacity nor welfare in an intertemporal context. It is not well-defined in a tax-distorted economy. It is rarely an indicator of the return to wealth. Copyright 1994 by The International Association for Research in Income and Wealth.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Income & Wealth.

Volume (Year): 40 (1994)
Issue (Month): 2 (June)
Pages: 123-41
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Handle: RePEc:bla:revinw:v:40:y:1994:i:2:p:123-41

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  1. John C. V. Pezzey, 2001. "Exact measures of income in two capital-resource-time economies," Working Papers in Ecological Economics 0102, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program. [Downloadable!]
  2. John C. V. Pezzey, 2002. "Exact Measures of Income in a Hyperbolic Economy," Economics and Environment Network Working Papers 0203, Australian National University, Economics and Environment Network. [Downloadable!]
  3. Partha Dasgupta & Karl-Goran Maler, 1998. "Decentralization Schemes, Cost-Benefit-Analysis, and Net National Product as a Measure of Social Well-Being," STICERD - Development Economics Papers 12, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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This page was last updated on 2008-8-11.


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