Geir B. Asheim
Can NNP be used for welfare comparisons?
Abstract: This paper contains a critical assessment of the claim
that nnp can be used for welfare comparisons. The analysis assumes that
national accounts are comprehensive (in particular, “greened” by taking
into account environmental amenities and natural resource depletion), but
does not assume optimal resource allocation. The general conclusion is that
greater nnp does not correspond to welfare enhancement, unless the net
investment flows are revalued. Real utility-nnp, and real measurable nnp
made comparable across time by means of a consumer price index, allow for
such revaluation, and thus indicate welfare improvement.
Keywords: National income accounting; dynamic welfare; (follow links to similar papers)
JEL-Codes: C43; D60; O47; Q01; (follow links to similar papers)
27 pages, September 29, 2005
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