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Changes in social welfare and sustainability: Theoretical issues and empirical evidence

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  • Vouvaki, Dimitra
  • Xepapadeas, Anastasios

Abstract

We analyze the time derivative of a Ramsey-Koopmans social welfare function (R-K SWF), as an indicator of genuine investment and current change in social welfare (CSW) conditions, when feedback or arbitrary rules are used for selecting policy variables in non-optimizing economies. When policy variables are selected arbitrarily, their accounting prices should determine current CSW in addition to the accounting prices of the economy's assets and genuine investment should be adjusted accordingly. We use our theoretical framework to characterize CSW conditions for non-optimizing economies, based on direct estimation of accounting prices. We use our theoretical model to provide empirical evidence regarding the CSW conditions for the Greek economy.

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  • Vouvaki, Dimitra & Xepapadeas, Anastasios, 2008. "Changes in social welfare and sustainability: Theoretical issues and empirical evidence," Ecological Economics, Elsevier, vol. 67(3), pages 473-484, October.
    • Handle: RePEc:eee:ecolec:v:67:y:2008:i:3:p:473-484
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    3. Kumar, Surender, 2013. "Comprehensive wealth and sustainable development in India," MPRA Paper 43809, University Library of Munich, Germany.
    4. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    5. Gren, Ing-Marie & Isacs, Lina, 2009. "Ecosystem services and regional development: An application to Sweden," Ecological Economics, Elsevier, vol. 68(10), pages 2549-2559, August.

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