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Appears in Collections:Economics Working Papers
Peer Review Status: Refereed
Title: Genuine savings and future well-being in Germany, 1850-2000
Author(s): Blum, Matthias
McLaughlin, Eoin
Hanley, Nicholas
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Citation: Blum M, McLaughlin E & Hanley N (2013) Genuine savings and future well-being in Germany, 1850-2000. Stirling Economics Discussion Paper, 2013-13.
Keywords: Sustainability
economic development
Net adjusted savings
Genuine Savings
JEL Code(s): E01
Issue Date: Dec-2013
Series/Report no.: Stirling Economics Discussion Paper, 2013-13
Abstract: Genuine Savings (GS), also known as ‘net adjusted savings', is a composite indicator of the sustainability of economic development. Genuine Savings reflects year-on-year changes in the total wealth or capital of a country, including net investment in produced capita, investment in human capital, depletion of natural resources, and damage caused by pollution. A negative Genuine Savings rate suggests that the stock of national wealth is declining and that future utility must be less than current utility, indicating that economic development is non-sustainable (Hamilton and Clemens, 1999). We make use of data over a 150 year period to examine the relationship between Genuine Savings and a number of indicators of well-being over time, and compare the relative changes in human, produced, and components of natural capital over the period. Overall, we find that the magnitude of genuine savings is positively related to changes in future consumption, with some evidence of a cointegrating relationship. However, the relationships between genuine savings and infant mortality or average heights are less clear.
Type: Working or Discussion Paper
Affiliation: Technische Universitat Munchen, Germany
University of Edinburgh

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