Genuine savings measurement and its application to the United Kingdom and Taiwan

The genuine savings index (GSI) is a simple indicator that can be used 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 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 in previous studies and tests its application with respect to the United Kingdom and Taiwan between 1970 and 1998, with the goal of assessing the feasibility of using such measures quite broadly as indices of sustainable development. The paper shows that both the United Kingdom and Taiwan have positive genuine savings rates over the period in question, with the United Kingdom registering lower ones than Taiwan.