Criteria for Assessing Sustainable Development: Theoretical Issues and Empirical Evidence for the Case of Greece

42 Pages Posted: 17 May 2005

See all articles by Anastasios Xepapadeas

Anastasios Xepapadeas

Athens University of Economics and Business; University of Bologna - School of Economics, Management, and Statistics

Dimitra Vouvaki

University of Crete - Department of Economics

Date Written: April 2005

Abstract

We formulate two kinds of sustainability criteria by using feedback and arbitrary rules for selecting policy variables in non optimizing economies. We show that when policy variables are selected arbitrarily their accounting prices could determine sustainability in addition to the accounting prices of the economy's assets. We use our theoretical framework to obtain estimates of sustainability conditions in real economies. Thus, the paper's contribution consists in developing a systematic theoretical framework for determining value functions, accounting prices and sustainability criteria, under fairly general non-optimizing behavioral rules, and then showing that this framework can be used in applied work to estimate sustainability conditions. Based on our theoretical model, we examined the case of the Greek economy. When there is no binding environmental policy then migration rate, growth of capital per worker and exogenous technical change are strong positive factors for sustainability. When we introduce potential environmental damages due to sulphur dioxide (SO2) emissions, our findings indicate that these damages affect negatively the sustainability criterion.

Keywords: Sustainability criteria, Non-declining social welfare, Accounting prices, Non optimizing economy, Feedback rule, Arbitrary rule

JEL Classification: Q01, O13

Suggested Citation

Xepapadeas, Anastasios and Vouvaki, Dimitra, Criteria for Assessing Sustainable Development: Theoretical Issues and Empirical Evidence for the Case of Greece (April 2005). Available at SSRN: https://ssrn.com/abstract=712484 or http://dx.doi.org/10.2139/ssrn.712484

Anastasios Xepapadeas (Contact Author)

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Dimitra Vouvaki

University of Crete - Department of Economics ( email )

GR-74100 Rethymnon, GR-74100
Greece

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