The role of technological progress in testing adjusted net savings

evidence from OECD countries

Research output: Contribution to journalArticle

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.

Original languageEnglish
Article number106382
JournalEcological Economics
Volume164
DOIs
Publication statusPublished - 1 Oct 2019

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OECD
savings
human capital
sustainability
nonrenewable resource
Testing
Savings
Adjusted net savings
OECD countries
Technological progress
education
Weak sustainability
indicator

Keywords

  • Adjusted net savings
  • Comprehensive accounting
  • Indicators of weak sustainability
  • Technological progress

Cite this

@article{4e320790b6de4e55a34ffd5981570941,
title = "The role of technological progress in testing adjusted net savings: evidence from OECD countries",
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.",
keywords = "Adjusted net savings, Comprehensive accounting, Indicators of weak sustainability, Technological progress",
author = "Mota, {Rui Pedro} and Cunha-e-S{\'a}, {Maria A.}",
note = "Funding text: this work was funded by Funda{\cc}{\~a}o para a Ci{\^e}ncia e a Tecnologia - FCT - ( UID/ECO/00124/2013 and Social Sciences DataLab, Project 22209), POR Lisboa ( LISBOA-01-0145-FEDER-007722 and Social Sciences DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209). Rui Mota acknowledges the financial support by FCT ( SFRH/BPD/81880/2011 ). Maria A. Cunha-e-S{\'a} acknowledges the support from FCT under the project UID/ECO/00124/2013",
year = "2019",
month = "10",
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doi = "10.1016/j.ecolecon.2019.106382",
language = "English",
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TY - JOUR

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T2 - evidence from OECD countries

AU - Mota, Rui Pedro

AU - Cunha-e-Sá, Maria A.

N1 - Funding text: this work was funded by Fundação para a Ciência e a Tecnologia - FCT - ( UID/ECO/00124/2013 and Social Sciences DataLab, Project 22209), POR Lisboa ( LISBOA-01-0145-FEDER-007722 and Social Sciences DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209). Rui Mota acknowledges the financial support by FCT ( SFRH/BPD/81880/2011 ). Maria A. Cunha-e-Sá acknowledges the support from FCT under the project UID/ECO/00124/2013

PY - 2019/10/1

Y1 - 2019/10/1

N2 - 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.

AB - 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.

KW - Adjusted net savings

KW - Comprehensive accounting

KW - Indicators of weak sustainability

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