Empirical testing of genuine savings as an indicator of weak sustainability: a three-country analysis of long run trends

Nick Hanley, Les Oxley, David Greasley, Eoin McLaughlin, Matthias Blum

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6 Citations (Scopus)
321 Downloads (Pure)

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 javascript:void(0);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.
Original languageEnglish
Pages (from-to)313-338
Number of pages26
JournalEnvironmental and Resource Economics
Volume63
Issue number2
Early online date18 Jun 2015
DOIs
Publication statusPublished - Feb 2016

Keywords

  • Weak sustainability
  • Genuine Savings
  • comprehensive investment
  • economic history
  • cointegration
  • indicators

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