a1 Department of Economics, Stanford University, USA. Email: firstname.lastname@example.org
a2 Department of Economics, University of Cambridge, UK. Email: email@example.com
a3 Department of Economics, Stanford University, Stanford, CA 94305, USA. Email: firstname.lastname@example.org
a4 Department of Economics, Purdue University, USA. Email: email@example.com
a5 Department of Natural Resources and Environmental Management, University of Hawaii, USA. Email: firstname.lastname@example.org
We develop and apply a consistent and comprehensive theoretical framework for assessing whether economic growth is compatible with sustaining wellbeing over time. Our approach differs from earlier approaches by concentrating on wealth rather than income. Sustainability is demonstrated by showing that a properly defined comprehensive measure of wealth is maintained through time. Our wealth measure is unusually comprehensive, capturing not only reproducible and human capital but also natural capital, health improvements and technological change. We apply the framework to five countries: the United States, China, Brazil, India and Venezuela. We show that the often-neglected contributors to wealth – technological change, natural capital and health capital – fundamentally affect the conclusions one draws about whether given nations are achieving sustainability. Indeed, even countries that display sustainability differ considerably in the kinds of capital that contribute to it.
The authors are most grateful to Kirk Hamilton and his colleagues at The World Bank for very helpful comments and for making their data available to them.