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Genuine Savings: Leading Indicator of Sustainable Development?

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  • Ferreira, Susana
  • Vincent, Jeffrey R

Abstract

The World Bank recently began publishing estimates of countries' "genuine savings": a comprehensive measure of net investment across all forms of capital (natural and human as well as produced). This article presents the first empirical investigation of the consistency of the Bank's estimates with the hypothesis that net investment should equal the difference between a country's average future consumption and its current consumption. Results show that the Bank's estimates are consistent only with weak versions of this hypothesis and then only for developing countries. Moreover, a simple autoregressive-integrated-moving-average (ARIMA) model outperforms any net investment measure, comprehensive or conventional, as a predictor of the difference between current and future consumption. In sum, the Bank's net investment estimates tend to move in the same direction as the difference between current and average future consumption in developing countries, but they have little value for predicting the magnitude of this difference.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 53 (2005)
Issue (Month): 3 (April)
Pages: 737-54

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Handle: RePEc:ucp:ecdecc:y:2005:v:53:i:3:p:737-54

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Web page: http://www.journals.uchicago.edu/EDCC/

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Cited by:
  1. Kirk Hamilton & Giovanni Ruta & Liaila Tajibaeva, 2006. "Capital Accumulation and Resource Depletion: A Hartwick Rule Counterfactual," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(4), pages 517-533, August.
  2. Greasley, David & Hanley, Nicholas & McLaughlin, Eoin & Oxley, Les & Warde, Paul, 2012. "Testing for long-run "sustainability": Genuine Savings estimates for B ritain, 1760-2000," Stirling Economics Discussion Papers 2012-05, University of Stirling, Division of Economics.
  3. Purnamita Dasgupta & Shikha Gupta, 2008. "Measuring Sustainability with Macroeconomic Data for India," Macroeconomics Working Papers 22149, East Asian Bureau of Economic Research.
  4. Arthur Grimes & les Oxley & Nicholas Tarrant, 2012. "Does Money Buy Me Love? Testing Alternative Measures of National Wellbeing," Working Papers 12_09, Motu Economic and Public Policy Research.
  5. Purnamita Dasgupta & Shikha Gupta, 2008. "Measuring Sustainability with Macroeconomic Data for India," Working Papers id:1574, eSocialSciences.
  6. Louis Dupuy, 2012. "International Trade and Sustainability : A survey," Working Papers hal-00701426, HAL.
  7. repec:laf:wpaper:201201 is not listed on IDEAS
  8. Hamilton, Kirk, 2005. "Testing genuine saving," Policy Research Working Paper Series 3577, The World Bank.
  9. Gnègnè, Yacouba, 2009. "Adjusted net saving and welfare change," Ecological Economics, Elsevier, vol. 68(4), pages 1127-1139, February.
  10. Giles Atkinson & Kirk Hamilton, 2007. "Progress along the path: evolving issues in the measurement of genuine saving," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 43-61, May.
  11. Simon Dietz & Eric Neumayer & Indra de Soysa, 2007. "Corruption, the resource curse and genuine saving," LSE Research Online Documents on Economics 973, London School of Economics and Political Science, LSE Library.
  12. Hamilton, Kirk & Ley, Eduardo, 2010. "Measuring National Income and Growth in Resource-Rich, Income-Poor Countries," World Bank - Economic Premise, The World Bank, issue 28, pages 1-7, August.
  13. Ferreira, Susana & Hamilton, Kirk, 2010. "Comprehensive wealth, intangible capital, and development," Policy Research Working Paper Series 5452, The World Bank.
  14. Oskenbayev, Yessengali & Yilmaz, Mesut & Abdulla, Kanat, 2013. "Resource concentration, institutional quality and the natural resource curse," Economic Systems, Elsevier, vol. 37(2), pages 254-270.
  15. Géraldine THIRY, 2011. "Beyond Gdp: Conceptual Grounds of Quantification. The Case of the Index of Economic Well-Being (IEWB)," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011048, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  16. Randall, Alan, 2008. "Is Australia on a sustainability path? Interpreting the clues," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), March.

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