Yamaguchi, Rintaro and Sato, Masayuki and Ueta, Kazuhiro (2009): Genuine savings with adjustment costs.
Download (91kB) | Preview
In this paper, we consider how genuine savings would be altered if the adjustment costs of capitals are taken into account in the stylized capitalresource model. It is shown that, in order to derive the modified genuine savings, through shadow prices, the original genuine savings have to be divided by the marginal adjustment costs of the capital in question. This implies that economies with volatile savings harbor hidden costs even if they are judged as sustainable by conventional genuine savings indicators.
|Item Type:||MPRA Paper|
|Original Title:||Genuine savings with adjustment costs|
|Keywords:||genuine savings; adjustment costs; sustainable development; natural capital|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E21 - Consumption; Saving; Wealth
|Depositing User:||Rintaro Yamaguchi|
|Date Deposited:||20. Jul 2009 05:30|
|Last Modified:||16. Feb 2013 00:48|
Arrow, Kenneth J., Partha Dasgupta and Karl-Goeran Maeler (2003), “Evaluating Projects and Assessing Sustainable Development in Imperfect Economies,” Environmental and Resource Economics 26: 647–685.
Arrow, Kenneth, Partha Dasgupta, Lawrence Goulder, Gretchen Daily, Paul Ehrlich, Georey Heal, Simon Levin, Karl-GoeranMaeler, Stephen Schneider, David Starrett and Brian Walker (2004), “Are We Consuming Too Much?,” Journal of Economic Perspectives 18: 147-172
Bovenberg, A. Lans and Lawrence H. Goulder (2000), “Neutralizaing the Adverse Industry Impacts of CO2 Abatement Policies: What Does It Cost?,” Discussion Paper 00-27, Resources for the Future.
Cooper, RussellW. and John C. Haltiwanger (2006), “On the Nature of Capital Adjustment Costs,” Review of Economic Studies 73: 611–633.
Dasgupta, Partha (2009), “TheWelfare Economic Theory of Green National Accounts,” Environmental and Resource Economics 42: 3–38.
Duczynski, Petr (2002), “Adjustment Costs in a Two-Capital Growth Model,” Journal of Economic Dynamics and Control 26: 837–850.
Hamilton, Kirk and Michael Clemens (1999), “Genuine Savings Rates in Developing Countries,” World Bank Economic Review 13: 333–356.
Hamilton, Kirk and Giles Atkinson (2006), Wealth, Welfare and Sustainability, Cheltenham, UK: Edward Elgar.
Hayashi, Fumio (1982), “Tobin’s Marginal q and Average q: A Neoclassical Interpretation,” Econometrica 50: 213–224.
Lucas, Robert E.(1967), “Adjustment Costs and the Theory of Supply,” Journal of Political Economy 75: 321-334.
Pearce, David and Giles Atkinson (1993), “Capital Theory and the Measurement of Sustainable Development: An Indicator of ’Weak’ Sustainability,” Ecological Economics 8: 103-108.
Romer, David (2001), Advanced Macroeconomics, 2nd ed, New York: McGraw-Hill.
Sato, Masayuki and Sovannroeun Samreth (2008), “Assessing Sustainable Development by Genuine Saving Indicator from Multidimensional Perspectives,” MPRA Paper No. 9966, Munich University.
Uzawa, Hirofumi (1969), “Time Preference and the Penrose Effect in a Two-Class Model of Economic Growth,” Journal of Political Economy 77: 628-652.
Uzawa, Hirofumi (2003), Economic Theory and Global Warming, New York: Cambridge University Press.
Weitzman, Martin L. (2007), “A Review of The Stern Review on the Economics of Climate Change,” Journal of Economic Literature 45: 703-724.
World Bank (2008), World Development Indicators 2008 Washington, D.C.: World Bank.