Discount rates, natural resources, and the measurement of aggregate economic growth in Africa

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Abstract

Over the last decade there has been a growing interest in depreciation of natural capital in national income accounts. Within this literature there has been limited discussion of the sensitivity of measurement to the choice of discount rate and the effect of using depreciated measures of growth in empirical analyses. Without attempting to estimate or justify a specific discount rate, this paper presents alternative sets of growth data for 18 African countries based on different assumptions of the appropriate discount rate to apply to natural capital. The data sets are then used in a statistical test of the causes of economic growth. Results of the statistical analysis indicate sensitivity to the choice of discount rate.

Original languageEnglish (US)
Pages (from-to)21-32
Number of pages12
JournalEcological Economics
Volume17
Issue number1
DOIs
StatePublished - 1996

Keywords

  • Africa
  • Economic growth
  • Natural resource accounting

ASJC Scopus subject areas

  • General Environmental Science
  • Economics and Econometrics

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