January 2, 2011

Sustainability and the Measurement of Wealth

by Kenneth J. Arrow, Partha Dasgupta, Lawrence H. Goulder, Kevin J. Mumford and Kirsten Oleson

- We develop a consistent and comprehensive theoretical framework for assessing whether economic growth is compatible with sustaining well-being over time. The framework focuses on whether a comprehensive measure of wealth - one that accounts for natural capital and human capital as well as reproducible capital - is maintained through time. Our framework also integrates population growth, technological change, and changes in health. We apply the framework to five countries that differ significantly in stages of development and resource bases: the United States, China, Brazil, India, and Venezuela.

Arrow, K.J., P. Dasgupta, L.H. Goulder, K.J. Mumford and K. Oleson (2010). "Sustainability and the Measurement of Wealth." NBER Working Paper No. 16599, Dec 2010.