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The Role of Technological Progress in Testing Adjusted Net Savings: Evidence from OECD Countries

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  • Mota, Rui Pedro
  • Cunha-e-Sá, Maria A.

Abstract

In this paper we investigate the relationship between comprehensive measures of savings and changes in future consumption in OECD countries. This relationship is at the basis of the interpretation of adjusted net savings as a weak sustainability indicator, and so, evidence of its validity provides support to the use of this indicator. We construct various measures of comprehensive savings for 20 OECD countries to include depletion from non-renewable resources, human capital investment and technological progress. Given their importance, especially for rich countries, we focus on the role of technical progress and human capital, in the form of changes in education level. We do not find strong evidence in favor of including green adjustments in the conventional net savings. However, we find compelling evidence for the inclusion of technological progress. Since this involves a forward looking term, the above result suggests that to construct an indicator of weak sustainability from conventional net savings, some estimate of future technological progress is needed.

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  • Mota, Rui Pedro & Cunha-e-Sá, Maria A., 2019. "The Role of Technological Progress in Testing Adjusted Net Savings: Evidence from OECD Countries," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    • Handle: RePEc:eee:ecolec:v:164:y:2019:i:c:11
    DOI: 10.1016/j.ecolecon.2019.106382
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    Cited by:

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    2. Luke McGrath & Stephen Hynes & John McHale, 2020. "Linking Sustainable Development Assessment in Ireland and the European Union with Economic Theory," The Economic and Social Review, Economic and Social Studies, vol. 51(2), pages 327-355.
    3. Batrancea Larissa & Rathnaswamy Malar Maran & Batrancea Ioan & Nichita Anca & Rus Mircea-Iosif & Tulai Horia & Fatacean Gheorghe & Masca Ema Speranta & Morar Ioan Dan, 2020. "Adjusted Net Savings of CEE and Baltic Nations in the Context of Sustainable Economic Growth: A Panel Data Analysis," JRFM, MDPI, vol. 13(10), pages 1-17, October.

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    More about this item

    Keywords

    Adjusted net savings; Indicators of weak sustainability; Technological progress; Comprehensive accounting;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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