Table of Contents

Handbook of Environmental and Resource Economics

Handbook of Environmental and Resource Economics

Elgar original reference

Edited by Jeroen C.J.M. van den Bergh

This major reference book comprises specially commissioned surveys in environmental and resource economics written by an international team of experts. Authoritative yet accessible, each entry provides a state-of-the-art summary of key areas that will be invaluable to researchers, practitioners and advanced students.

Chapter 63: Indicators of Economic and Ecological Health

B. Hannon

Subjects: economics and finance, environmental economics, environment, environmental economics


Bruce Hannon’ 1. Economic health measures Ecologists need a consistent focus for their idea of ecosystem health. They must work to achieve consensus on that focus and embed that goal in national and local policy making. I want to propose a candidate for that goal. It is fashioned after the economists’ view of the economic system with an attempt to avoid their pitfalls. Economists refer to the total consumption of the nation by the more general term of national output or, in the terms of this paper, ‘net output’. The net output of a modern economy is somewhat arbitrarily but officially defined as the amount of personal and government consumption (cars, food, highways, defence, and so on), plus the amount of net export of goods and services, plus the amount of new capital formed (investment for expansion and replacement), plus any changes in the inventory of goods, in a given period. When taken as an annual sum, this amount is called the gross national product or GNP. The GNP is a flow, not a stock, and it is measured in dollars per year.2 All the physical units of things we bought as consumers, the things bought by the government, the exported goods (for example, computers) less the imported goods (for example, oil), the amount of new capital stocks purchased (say, machinery and buildings), the increases in the inventory stocks (such as mined coal), less the decreases of these sorts of stocks (such as unsold cars), are multiplied by their respective...

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