Social accounting and welfare measurement in a growth model with human capital

Article Abstract:

A Ramsey growth model is developed to determine welfare analysis and social accounting methods for an economy wherein the human capital accumulation variable is given importance. This variable is dependent on the time spent by consumers in education. It also creates externalities in the production function of firms. Results show that social accounting must include data on the net national product as well as the value of human capital investments and leisure time. Moreover, national product measures will underestimate welfare levels in cases where externalities are not internalized.

Models, Analysis, Social services, Social service, Human capital, Social accounting

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Comment on C.R. Hulten, "Accounting for the Wealth of Nations: the Net Versus Gross Output Controversy and its Ramifications.' (response to article by Charles R. Hulten in this issue, p. S9)

Article Abstract:

A study was conducted to analyze welfare consequences of economic development. The study examines GNP and net national product (NNP) measures. Results show that neither provide a correct measure of wealth. However, the NNP measure can be reconsidered as a welfare measure because it is a vital factor of social wealth. The problem with these economic measures generates anticipated disembodied technological progress.

Measurement

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Accounting for the wealth of nations: the net versus gross output controversy and its ramifications

Article Abstract:

A study was conducted to examine the issue of net versus gross product measurement of economic development. The controversy has been further heightened by the introduction of environmental factors into the analysis. Results show that both measures are complementary and indicate various aspects of growth. Gross product measures production structure while net product measures welfare consequences of development.

Accounting and auditing

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