TY - JOUR
T1 - Empirical testing of Genuine Savings as an indicator of weak sustainability
T2 - a three-country analysis of long-run trends
AU - Hanley, Nicholas David
AU - Oxley, Les
AU - Greasley, David
AU - McLaughlin, Eoin
AU - Blum, Matthias
N1 - The authors thank The Leverhulme Trust for funding this work under the project “History and the Future: the Predictive Power of Sustainable Development Indicators” (Grant Number F00241).
PY - 2015
Y1 - 2015
N2 - Genuine Savings has emerged as a widely-used indicator of sustainable development. This approach to conceptualising sustainability has strong links to work published by Anil Markandya and colleagues over 20 years ago. 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 consumption 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 consumption, and fail to reject the underlying basic theoretical result on the relationship between these two macroeconomic variables. These findings provide some support for the GS measure of weak sustainability.
AB - Genuine Savings has emerged as a widely-used indicator of sustainable development. This approach to conceptualising sustainability has strong links to work published by Anil Markandya and colleagues over 20 years ago. 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 consumption 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 consumption, and fail to reject the underlying basic theoretical result on the relationship between these two macroeconomic variables. These findings provide some support for the GS measure of weak sustainability.
KW - Weak sustainability
KW - Genuine Savings
KW - Comprehensive investment
KW - Economic history
KW - Sustainable development indicators
KW - Cointegration
UR - http://link.springer.com/content/esm/art:10.1007/s10640-015-9928-7/file/MediaObjects/10640_2015_9928_MOESM1_ESM.docx
U2 - 10.1007/s10640-015-9928-7
DO - 10.1007/s10640-015-9928-7
M3 - Article
SN - 0924-6460
VL - In press
JO - Environmental and Resource Economics
JF - Environmental and Resource Economics
ER -