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Appears in Collections:Economics Working Papers
Peer Review Status: Refereed
Title: Empirical testing of genuine savings as an indicator of weak sustainability: a three-country analysis of long run trends
Other Titles: SEDP-2014-03-Oxley-Hanley-Greasley-Blum-McLaughlin-Kunnas-Warde
Authors: Oxley, Les
Hanley, Nicholas
Greasley, David
Blum, Matthias
McLaughlin, Eoin
Kunnas, Jan
Warde, Paul
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Citation: Oxley L, Hanley N, Greasley D, Blum M, McLaughlin E, Kunnas J & Warde P (2014) Empirical testing of genuine savings as an indicator of weak sustainability: a three-country analysis of long run trends. Stirling Economics Discussion Paper, 2014-03.
Keywords: Weak sustainability
Genuine Savings
comprehensive investment
economic history
Issue Date: Apr-2014
Series/Report no.: Stirling Economics Discussion Paper, 2014-03
Abstract: Genuine Savings has emerged as a widely-used indicator of sustainable development. In this paper, we use long-term data stretching back to 1870 to undertake empirical tests of the relationship between Genuine Savings (GS) and future well-being for three countries: Britain, the USA and Germany. Our tests are based on an underlying theoretical relationship between GS and changes in the present value of future consumption. Based on both single country and panel results, we find evidence supporting the existence of a cointegrating (long run equilibrium) relationship between GS and future well-being, and fail to reject the basic theoretical result on the relationship between these two macroeconomic variables. This provides some support for the GS measure of weak sustainability. We also show the effects of modelling shocks, such as World War Two and the Great Depression.
Type: Working or Discussion Paper
Affiliation: University of Waikato
University of Edinburgh
Technische Universitat Munchen, Germany
University of Edinburgh
University of East Anglia

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