Premium
Sustainability and Technical Progress
Author(s) -
Weitzman Martin L.
Publication year - 1997
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00043
Subject(s) - economics , sustainability , meaning (existential) , technological change , capital (architecture) , depreciation (economics) , residual , simple (philosophy) , term (time) , solow residual , technical progress , macroeconomics , econometrics , capital formation , growth accounting , financial capital , human capital , mathematics , market economy , productivity , philosophy , algorithm , psychotherapist , history , ecology , archaeology , biology , psychology , epistemology , quantum mechanics , physics , total factor productivity
A rigorous model connects together the following three basic concepts: (1) “sustainability”— meaning the generalized future power of an economy to consume over time; (2) “Green NNP”— meaning a current measure of national income that subtracts off from GNP not just depreciation of capital but also, more generally, depletion of environmental assets evaluated at current efficiency prices; (3) “technological progress”— meaning a projection onto the future of the so‐called “Solow residual”. A simple general formula is derived. Some crude calculations suggest a possibly strong effect of the residual, which hints that our best present estimates of long‐term sustainability may be largely driven by predictions of future technological progress.