A Growth Theoretical Approach
New Horizons in Environmental Economics series
BACKGROUND For several decades, a considerable amount of research has been devoted to issues surrounding the use and design of the national accounts. One of the basic ideas behind this research has been to provide a coherent framework for measuring national well-being. This idea is closely related to the concept of social accounting. According to The New Palgrave Dictionary of Economics, ‘social accounting’ refers to ‘the body of data that portrays a nation’s economic activity in terms of output produced and incomes created, the stocks of capital goods and other inputs required, and the ﬁnancial pathways and instruments used’. In accordance with this deﬁnition, as well as with a broader perspective that includes many nations in a global economy, a welfare economic theory of social accounting has been developed. This book addresses the theory of social accounting, with particular emphasis on valuation problems facing imperfectly competitive market economies. One of the basic issues in the theory of social accounting is the idea of associating a comprehensive measure of net national product (NNP) with the welfare of a dynamic economy. It is easy to argue that this idea has practical appeal. If it were possible to measure welfare solely by means of a static and (in principle) observable indicator, welfare comparisons would become manageable in practice. Meanwhile, it is quite clear that the conventional NNP does not constitute such an indicator. The only type of consumption included in the conventional NNP refers to goods and services, whereas the concept of...