Testing the predictive power of genuine savings as a long-run indicator of future well-being
This paper reports the first long-run test of how Genuine Savings (also called comprehensive investment or adjusted net savings) predicts future well-being. The theory of weak sustainability suggests that a country with a positive level of Genuine Savings (GS) should experience non-declining future utility. Despite the widespread uptake of GS, previous tests of its predictive power are for short time intervals. We assemble data for British capital back to 1750, and construct several net investment measures which are used to predict two alternative measures of future well-being: future consumption per capita and real wages. An allowance for a “value of time” due to technological progress is also included. Our results show that GS-type measures can predict changes in future well-being reasonably well over 50 or 100 years into the future.
|Date of creation:||Dec 2012|
|Date of revision:|
|Contact details of provider:|| Postal: +61 2 6125 3807|
Phone: +61 2 6125 3807
Fax: +61 2 6125 0744
Web page: http://rse.anu.edu.au/CEH/
More information through EDIRC
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.:
- Trinh Le & John Gibson & Les Oxley, 2006. "A Forward-Looking Measure Of The Stock Of Human Capital In New Zealand," Manchester School, University of Manchester, vol. 74(5), pages 593-609, 09.
When requesting a correction, please mention this item's handle: RePEc:auu:hpaper:007. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.