Evaluating Projects and Assessing Sustainable Development in Imperfect Economies
AbstractWe are interested in three related questions:(1) How should accounting prices be estimated?(2) How should we evaluate policy change in animperfect economy? (3) How can we check whetherintergenerational well-being will be sustainedalong a projected economic programme? We do notpresume that the economy is convex, nor do weassume that the government optimizes on behalfof its citizens. We show that the same set ofaccounting prices should be used both forpolicy evaluation and for assessing whether ornot intergenerational welfare along a giveneconomic path will be sustained. We also showthat a comprehensive measure of wealth,computed in terms of the accounting prices, canbe used as an index for problems (2) and (3)above. The remainder of the paper is concernedwith rules for estimating the accounting pricesof several specific environmental naturalresources, transacted in a few well knowneconomic institutions. Copyright Kluwer Academic Publishers 2003
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 26 (2003)
Issue (Month): 4 (December)
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Web page: http://www.springerlink.com/link.asp?id=100263
accounting prices; bifurcation points; cost-benefit analysis; environmental Kuznets curve; genuine investment; genuine wealth; hysteresis; intertemporal welfare; irreversibility; non-convexity; Pontryagin Principle; population growth; property rights; separatrix; social discount rate; structural stability; sustainable development; technological change; thresholds;
Other versions of this item:
- Kenneth Arrow & Partha Dasgupta & Karl-Göran Mäler, 2003. "Evaluating Projects and Assessing Sustainable Development in Imperfect Economies," Working Papers 2003.109, Fondazione Eni Enrico Mattei.
- D6 - Microeconomics - - Welfare Economics
- D9 - Microeconomics - - Intertemporal Choice
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
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