Skip to main content
×
×
Home

Australia: a land of missed opportunities?

  • David Greasley (a1), Eoin McLaughlin (a2), Nick Hanley (a3) and Les Oxley (a4)
Abstract

Comprehensive Investment (CI) may provide an indicator of future changes in a country's per capita consumption. The authors explore the utility of the CI indicator for Australia by constructing CI data since 1861 and by estimating their relationship with changes in future consumption over periods of 50 years ahead. The CI measures include changes in natural, produced and human capital, and make allowance for exogenous technological progress. The results are used to consider how Australia's natural capital exploitation influenced the consumption of future generations. Further, the authors gauge if low CI relative to other leading OECD countries resulted in lower consumption levels in Australia over time than feasible, had it saved more.

Copyright
References
Hide All
Abramovitz, M. (1986), ‘Catching up, forging ahead, and falling behind’, Journal of Economic History 46: 385406.
Arrow, K.J., Dasgupta, P., and Maler, K-G. (2003), ‘Evaluating projects and assessing sustainable development in imperfect economies’, Environmental and Resource Economics 26: 647685.
Arrow, K.J., Dasgupta, P., Goulder, L.H., Mumford, K.J., and Oleson, K. (2012), ‘Sustainability and the measurement of wealth’, Environment and Development Economics 17(3): 317353.
Ashiem, G. and Weitzman, M. (2001), ‘Does NNP growth indicate welfare improvement?’, Economic Letters 73: 233239.
Australian Bureau Statistics (ABS) (various years), Canberra: Australian System of National Accounts.
Australian Government Futures Fund (2014), [Available at] www.futurefund.gov.au.
Battelino, R. (2010), ‘Mining booms and the Australian economy’, Reserve Bank of Australia Bulletin, March Quarter.
Blainey, G. (1970), ‘A theory of mineral discovery: Australia in the nineteenth century’, Economic History Review 23: 298313.
Broadberry, S. and Irwin, D.A. (2007), ‘Lost exceptionalism? Comparative income and productivity in Australia and the UK, 1861–1948’, Economic Record 83: 262274.
Brown, R.P.C., Asafu-Adjaye, J., Draca, M., and Straton, A. (2005), ‘How useful is the genuine savings rate as a sustainability indicator for regions within countries? Australia and Queensland compared’, Australian Economic Review 38: 370388.
Butlin, M., Dixon, R., and Lloyd, P.J. (2015), ‘A statistical narrative’, in Ville, S. and Withers, G. (eds), The Cambridge Economic History of Australia, Melbourne: Cambridge University Press, pp. 465488.
Butlin, N.G. (1962), Australian Domestic Product, Investment and Foreign Borrowing 1861–1938/39, Cambridge: Cambridge University Press.
Cashin, P. and McDermott, J. (2000), ‘Riding the sheep's back: examining Australia's dependence on wool exports’, Economic Record 78: 249263.
Engle, R.F and Granger, C.W.J. (1987), ‘Co-integration and error correction: representation, estimation and testing’, Econometrica 55(2): 251276.
Ferreira, S. and Vincent, J.R. (2005), ‘Genuine savings: leading indicator of sustainable development?’, Economic Development and Cultural Change 53: 737754.
Ferreira, S., Hamilton, K., and Vincent, J.R. (2008), ‘Comprehensive wealth and future consumption: accounting for population growth’, World Bank Economic Review 22(2): 233248.
Gammage, B. (2011), The Biggest Estate on Earth, Sydney: Allen & Unwin.
Greasley, D. (2015), ‘Industrializing Australia's natural capital’, in Ville, S. and Withers, G. (eds), The Cambridge Economic History of Australia, Melbourne: Cambridge University Press, pp. 150177.
Greasley, D. and Madsen, J. (2016), ‘The rise and fall of exceptional Australian incomes since 1800’, Australian Economic History Review; doi:10.1111/aehr.12111.
Greasley, D. and Oxley, L. (2010), ‘Cliometrics and time series econometrics’, Journal of Economic Surveys 24: 9701042.
Greasley, D., Hanley, N., Kunnas, J., McLaughlin, E., Oxley, L., and Warde, P. (2014), ‘Testing genuine savings as a forward-looking indicator of future well-being over the (very) long-run’, Journal of Environmental Economics and Management 67: 171188.
Hamilton, K. and Clemens, M. (1999), ‘Genuine savings rates in developing countries’, World Bank Economic Review 13(2): 333356.
Hamilton, K. and Hartwick, J. (2005), ‘Investing exhaustible resource rents and the path of Consumption’, Canadian Journal of Economics 38(2): 615621.
Hamilton, K. and Withagen, C. (2007), ‘Savings and the path of utility’, Canadian Journal of Economics 40: 703713.
Hamilton, K., Ruta, G., and Tajibaeva, L. (2006), ‘Capital accumulation and resource depletion: a Hartwick rule counterfactual’, Environmental and Resource Economics 34: 517533.
Hanley, N., Oxley, L., Greasley, D., McLaughlin, E., and Blum, M. (2016), ‘Empirical testing of genuine savings as an indicator of weak sustainability: a three-country analysis of long-run trends’, Environmental and Resource Economics 63: 313338.
Hartwick, J.M. (1977), ‘Intergenerational equity and the investing of rents from exhaustible resources’, American Economic Review 67(5): 972974.
Homer, S. and Sylla, R. (2005), A History of Interest Rates, Hoboken, NJ: John Wiley.
Kozack, J. (2005), ‘Considerations in the choice of the appropriate discount rate for evaluating sovereign debt restructurings’, IMF Policy Discussion Paper No. 05/09, Washington, DC.
Lindmark, M. and Acar, S. (2013), ‘Sustainability in the making: a historical estimate of Swedish sustainable and unsustainable development 1850–2000’, Ecological Economics 86: 176187.
Maddison, A. (2001), The World Economy: A Millennial Perspective, Paris: OECD.
Maddock, R. (2015), ‘Capital markets’, in Ville, S. and Withers, G. (eds), The Cambridge Economic History of Australia, Melbourne: Cambridge University Press, pp. 267286.
Madsen, J.B. (2015), ‘Australian economic growth and its drivers since European settlement’, in Ville, S. and Withers, G. (eds), The Cambridge Economic History of Australia, Melbourne: Cambridge University Press, pp. 2951.
Manuelli, R.E. and Seshadri, A. (2014), ‘Human capital and the wealth of nations’, American Economic Review 104(9): 27362762.
McLean, I.W. (2013), Why Australia Prospered: The Shifting Economic Sources of Economic Growth, Princeton, NJ: Princeton University Press.
OECD (2017), OECD Indicators, [Available at] https://data.oecd.org/interest/long-term-interest-rates.htm.
Pearce, D.W. and Atkinson, G. (1993), ‘Capital theory and the measurement of sustainable development: an indicator of weak sustainability’, Ecological Economics 8: 103110.
Pemberton, M. and Ulph, D. (2001), ‘Measuring income and measuring sustainability’, Scandinavian Journal of Economics 103: 2540.
Pezzey, J.C.V. (2004), ‘One-sided sustainability tests with amenities, and changes in technology, trade and population’, Journal of Environmental Economics and Management 48: 613631.
Pezzey, J.C.V. and Burke, P. (2013), ‘Measuring global sustainability using a precautionary valuation of CO2 emissions’, Paper presented at the Australian Association of Agricultural and Resource Economists' Conference, Sydney, Australia.
Pezzey, J.C.V., Hanley, N., Turner, K., and Tinch, D. (2006), ‘Comparing augmented sustainability measures for Scotland: is there a mismatch?’, Ecological Economics 57: 7074.
Pope, D. (1986), ‘Australian money and banking statistics’, Source Papers in Economic History No. 11, Australia National University, Canberra.
Randall, A. (2008), ‘Is Australia on a sustainability path? Interpreting the clues’, Australian Journal of Agricultural and Resource Economics 52: 7795.
Syed, A., Grafton, Q., and Kalirajan, K. (2013), ‘Productivity in the Australian mining sector’, BREE Discussion Paper Series No. 13.01, Bureau of Resources and Energy Economics, Commonwealth of Australia.
UNEP (2012), United National Environmental Programme, [Available at] www.unep.org.
UNU-IHDP and UNEP (2014), Inclusive Wealth Report 2014. Measuring Progress toward Sustainability, Cambridge: Cambridge University Press.
Weitzman, M. (1997), ‘Sustainability and technical progress’, Scandinavian Journal of Economics 91(1): 113.
Weitzman, M. (1999), ‘Pricing the limits to growth from minerals depletion’, Quarterly Journal of Economics 114(2): 691706.
World Bank (2006), Where is the Wealth of Nations? Measuring Capital for the 21st Century, Washington, DC: World Bank.
World Bank (2011), The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium, Washington, DC: World Bank.
Wright, G. and Czelusta, J. (2002), ‘Resource-based economic growth, past and present’, Unpublished manuscript, Stanford University.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Environment and Development Economics
  • ISSN: 1355-770X
  • EISSN: 1469-4395
  • URL: /core/journals/environment-and-development-economics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×
Type Description Title
PDF
Supplementary materials

Greasley supplementary material
Online Appendix

 PDF (579 KB)
579 KB

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed