Net National Product and Sustainability
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Net national product (NNP) is an important item for a country. Martin Weitzman published his seminal paper on the significance for dynamic welfare of comprehensive national accounting aggregates, where he had included important theoretical contributions on welfare and sustainable accounting. In the aftermath of the World Commission on Environment and Development it became important to investigate whether the concept of NNP can serve as an indicator of sustainability. Green national accounting includes depletion and degradation of natural capital as negative components to the vector of investme...
Net national product (NNP) is an important item for a country. Martin Weitzman published his seminal paper on the significance for dynamic welfare of comprehensive national accounting aggregates, where he had included important theoretical contributions on welfare and sustainable accounting. In the aftermath of the World Commission on Environment and Development it became important to investigate whether the concept of NNP can serve as an indicator of sustainability. Green national accounting includes depletion and degradation of natural capital as negative components to the vector of investment goods and adds flows of environmental amenities to the vector of consumption goods. To sustain constant consumption in the Hartwick rule prescribes reinvesting all resource rents in reproducible capital. Many authors seem to indicate that Hartwick rule is relevant to an open economy whose reproducible capital is defined to include foreign assets. Hartwick refers to it as a Saudi Arabian rule, but Hoel expresses it for a single resource-exporter.
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