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Prosperity, Sustainability and the Measurement of Wealth

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  • Kevin J. Mumford

Abstract

Gross domestic product (GDP) and household income measures provide invaluable metrics of economic activity in an economy, but they tell us little about the sustainability of the economic trends. National wealth accounting can be utilised to determine the size of the underlying productive base, which provides insight into the sustainability of economic activities and indicates the potential for intergenerational well-being. An empirical methodology was developed to measure wealth and then used to analyse multiple Asian countries. A common theme found across the Asian countries was the depletion of natural capital (forests, minerals and energy) and the development of human and produced capital. A strong correlation between growth in GDP per capita and wealth per capita was also found, but there are instances of GDP growth and wealth growth having different signs.

Suggested Citation

  • Kevin J. Mumford, 2016. "Prosperity, Sustainability and the Measurement of Wealth," Asia and the Pacific Policy Studies 201619, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:appswp:201619
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    File URL: http://onlinelibrary.wiley.com/doi/10.1002/app5.132/epdf
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    References listed on IDEAS

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    1. World Bank, 2011. "The Changing Wealth of Nations : Measuring Sustainable Development in the New Millennium," World Bank Publications - Books, The World Bank Group, number 2252, December.
    2. Arrow, Kenneth J. & Dasgupta, Partha & Goulder, Lawrence H. & Mumford, Kevin J. & Oleson, Kirsten, 2012. "Sustainability and the measurement of wealth," Environment and Development Economics, Cambridge University Press, vol. 17(3), pages 317-353, June.
    3. Dasgupta, Partha & Mã„Ler, Karl-Gã–Ran, 2000. "Net national product, wealth, and social well-being," Environment and Development Economics, Cambridge University Press, vol. 5(1), pages 69-93, February.
    4. Timothy N. Bond & Kevin Lang, 2019. "The Sad Truth about Happiness Scales," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1629-1640.
    5. Dasgupta, Partha, 2001. "Human Well-Being and the Natural Environment," OUP Catalogue, Oxford University Press, number 9780199247882, Decembrie.
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    Cited by:

    1. Robi Kurniawan & Shunsuke Managi, 2019. "Linking Wealth and Productivity of Natural Capital for 140 Countries Between 1990 and 2014," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 443-462, January.
    2. Sugiawan, Yogi & Kurniawan, Robi & Managi, Shunsuke, 2019. "Are carbon dioxide emission reductions compatible with sustainable well-being?," Applied Energy, Elsevier, vol. 242(C), pages 1-11.
    3. Sugiawan, Yogi & Managi, Shunsuke, 2019. "New evidence of energy-growth nexus from inclusive wealth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 40-48.
    4. Olga V. Zabelina & Maria V. Sergeeva, 2022. "Inclusive economic growth through employment and income: Experience of the Russian Federation," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(1), pages 21-48.
    5. Suharno Suharno & Nurul Anwar, 2022. "The Energy Demand Elasticity in Relation to Gross Domestic Product in Indonesia: Sectoral Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 634-640, July.
    6. Soumaïla Gansonré & Ramatu M. Al‐Hassan & Idrissa M. Ouédraogo & George T. Kwadzo & Edward E. Onumah, 2023. "Sustainability and Wealth of Rural Households: Measurement and Inequality Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(1), pages 150-169, March.
    7. Mark Fabian, 2019. "Racing from Subjective Well-Being to Public Policy: A Review of The Origins of Happiness," Journal of Happiness Studies, Springer, vol. 20(6), pages 2011-2026, August.

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    More about this item

    Keywords

    wealth accounting; sustainability; economic policy; intergenerational;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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