Pilot Indices of Genuine Savings for the UK and Taiwan, from 1970 to 1998

Abstract

Genuine Savings Index (GSI) is a simple indicator to assess an economy's sustainability. It defines wealth more broadly than orthodox national accounts, and recalculates national savings figures based on this new definition. Genuine Savings (GS) aim to represent the value of the net change in the whole range of assets that are important for development: produced assets, natural resources, environmental quality, and human resources.

This paper takes the broad framework developed earlier and tests its application to two countries, The UK and Taiwan, between the years 1970 and 1998 with the goal of assessing the feasibility of using such measures quite broadly as indices of sustainable development (SD). It shows both the UK and Taiwan have positive GS rates over the years, but the UK has relatively lower ones. Sources of data and methodological factors are discussed, national comparability is investigated, and the policy uses derived from the exercise are analyzed.

Keywords: genuine savings, national capital, sustainable development, economic growth, GDP, national accounting, environmental pollution, natural resource depletion

JEL Classification: O13, 015, O21, 057, Q01