National product related welfare measures in the presence of technological change, externalities and uncertainty
2011 (English)In: Green national accounting and sustainability / [ed] Chuan-Zhong Li och Karl-Gustaf Löfgren, Cheltenham: Edward Elgar Publishing, 2011, 178-189 p.Chapter in book (Refereed)
The purpose of this paper is to discuss under what conditions welfare can be measured by observables related to the national product (or Hamiltonian along the optimal trajectory). Under nonattributable technological or environmental change, welfare will depend on time itself, meaning that the Hamiltonian along the optimal trajectory will be a biased measure of welfare. This result will also hold if we make the time dependence of welfare endogenous, by replacing technological change will externalities that are not internalized during optimization. On the other hand, if we take the externalities fully into account, then the Hamiltonian will represent the appropriate measure of welfare. Similar results also hold in the case of uncertainty, where we show that a ‘generalized’ Hamiltonian provides a welfare measure, and that the deterministic measures are special cases of their stochastic counterparts.
Place, publisher, year, edition, pages
Cheltenham: Edward Elgar Publishing, 2011. 178-189 p.
Research subject Economics
IdentifiersURN: urn:nbn:se:umu:diva-60118DOI: 10.1007/BF00691572ISBN: 978-1-84844-691-5ISBN: 1-84844-691-8OAI: oai:DiVA.org:umu-60118DiVA: diva2:557908
Also published as an article in: Environmental Resource Economics, ISSN: 0924-6460 (Print)1573-1502 (Online); Vol. 5 (1995):4, pp 321-332.2012-10-012012-10-012012-10-29Bibliographically approved