National product related welfare measures in the presence of technological change: Externalities and uncertainty
AbstractThe purpose of this paper is to discuss under what conditions welfare can be measured by observables related to the national product (or Hamiltonian along the optimal trajectory). Under nonattributable technological or environmental change, welfare will depend on time itself, meaning that the Hamiltonian along the optimal trajectory will be a biased measure of welfare. This result will also hold if we make the time dependence of welfare endogenous, by replacing technological change will externalities that are not internalized during optimization. On the other hand, if we take the externalities fully into account, then the Hamiltonian will represent the appropriate measure of welfare. Similar results also hold in the case of uncertainty, where we show that a ‘generalized’ Hamiltonian provides a welfare measure, and that the deterministic measures are special cases of their stochastic counterparts. Copyright Kluwer Academic Publishers 1995
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 5 (1995)
Issue (Month): 4 (June)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100263
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Karl-Göran Mäler, 1991. "National accounts and environmental resources," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(1), pages 1-15, March.
- William A. Brock & Michael J. P. Magill, 1978.
"Dynamics Under Uncertainty,"
324, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Hulten, Charles R, 1992. " Accounting for the Wealth of Nations: The Net versus Gross Output Controversy and Its Ramifications," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages S9-24, Supplemen.
- Asheim, G.B. & Brekke, K.A., 1993. "Sustainability when Resource Management has Stochastic Consequences," Papers 01-93, Norwegian School of Economics and Business Administration-.
- Hartwick, John M., 1990.
"Natural resources, national accounting and economic depreciation,"
Journal of Public Economics,
Elsevier, vol. 43(3), pages 291-304, December.
- John M. Hartwick, 1990. "Natural Resources, National Accounting and Economic Depreciation," Working Papers 771, Queen's University, Department of Economics.
- M. L. Weitzman, 1974.
"On the Welfare Significance of National Product in Dynamic Economy,"
125, Massachusetts Institute of Technology (MIT), Department of Economics.
- Weitzman, Martin L, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, MIT Press, vol. 90(1), pages 156-62, February.
- Asheim, Geir B, 1994. " Net National Product as an Indicator of Sustainability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 257-65.
- Merton, Robert C, 1975.
"An Asymptotic Theory of Growth under Uncertainty,"
Review of Economic Studies,
Wiley Blackwell, vol. 42(3), pages 375-93, July.
- Magill, Michael J. P., 1977. "Some new results on the local stability of the process of capital accumulation," Journal of Economic Theory, Elsevier, vol. 15(1), pages 174-210, June.
- Winter-Nelson, Alex, 1996. "Discount rates, natural resources, and the measurement of aggregate economic growth in Africa," Ecological Economics, Elsevier, vol. 17(1), pages 21-32, April.
- Haener, Michel K. & Adamowicz, Victor L., 2000. "Incorporation of risk in regional forest resource accounts," Ecological Economics, Elsevier, vol. 33(3), pages 439-455, June.
- Weitzman, Martin L., 1998.
"On the welfare significance of national product under interest-rate uncertainty,"
European Economic Review,
Elsevier, vol. 42(8), pages 1581-1594, September.
- Martin L. Weitzman, 1996. "On the Welfare Significance of National Product Under Interest-Rate Uncertainty," Harvard Institute of Economic Research Working Papers 1776, Harvard - Institute of Economic Research.
- Butterfield, David W., 2003. "Resource depletion under uncertainty: implications for mine depreciation, Hartwick's Rule and national accounting," Resource and Energy Economics, Elsevier, vol. 25(3), pages 219-238, August.
- Chuan-Zhong Li & Karl-Gustaf Löfgren, 2012. "Genuine saving under stochastic growth," Letters in Spatial and Resource Sciences, Springer, vol. 5(3), pages 167-174, October.
- Winter-Nelson, Alex, 1995. "Natural resources, national income, and economic growth in Africa," World Development, Elsevier, vol. 23(9), pages 1507-1519, September.
- Mino, Kazuo, 2004. "On the Generalized Weitzman's Rule," MPRA Paper 16996, University Library of Munich, Germany.
- Mino, Kazuo, 2004. "Weitzman's rule with market distortions," Japan and the World Economy, Elsevier, vol. 16(3), pages 307-329, August.
- Marklund, Per-Olov, 2004. "Essays on Productive Efficiency, Shadow Prices, and Human Capital. PhD Thesis," UmeÃ¥ Economic Studies 621, Umeå University, Department of Economics.
- Li, Chuan-Zhong & Lofgren, Karl-Gustaf, 2000. "Renewable Resources and Economic Sustainability: A Dynamic Analysis with Heterogeneous Time Preferences," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 236-250, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.