Nat Inc Accts and Limits on Subsitutability 111910 sv

Nat Inc Accts and - Ecological Economics Ecological economics is an attempt to help rectify the tendency to ignore humans in ecology while at the

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Ecological Economics Ecological economics is an attempt to help rectify the tendency to ignore humans in ecology, while at the same time rectifying the parallel tendency to ignore the natural world in the social sciences. It is not a single new paradigm based in shared assumptions and theory. It represents a commitment among economists, ecologists, and others, both as academics and practitioners, to learn from each other, to explore new patterns of thinking together, and to facilitate the derivation and implementation of new economic and environmental policies. - Costanza et al. , 1997 n Introduction to Ecological Economics An Introduction to Ecological Economics – Allocation : relative division of resource flow among alternative productive uses. A good allocation is one that allocates product in conformity with individual preferences, as weighted by the ability to pay. EFFICIENCY – solution, markets. – Distribution : division of resource flow as embodied in final goods and service, among alternative people. Just or fair, inequality limited. EQUITY – solution, direct transfer or taxes, or change property rights. – Scale : volume of throughput – flow of energy (recall the materials balance approach)
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Relative Ranking in Environmental and Ecological Economics Env. Econ. Ecol. Econ llocation: Allocation: Distribution: Scale:
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The Standard Circular Flow Model of Economic Activity Two types of decision makers – households and firms. Two types of markets – for goods and services and for factors of production
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National Income Accounts: Gross Domestic Product • Gross Domestic Product (GDP) is the market value of all final goods and services produced within a country within a given period of time. – “Market value…” – “…of all …” – “…final…” – “…goods and services…” – “…produced…” – “…within a country…” – ”…in a given period of time”. • Can be calculated one of two ways: – Adding up total expenditure by households, or – Adding up total income (wages, rent, and profits) paid by firms.
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GDP = C + I + G + (X - M) • Consumption (C): spending by households on goods and services, with the exception of new housing. • Investment (I): spending on capital equipment, inventories, and structures, including household purchases of new housing. • Government Purchases (G): spending on goods and services by local, state, and federal governments. • Net Exports (X - M): spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports).
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US GDP (2006) = C + I + G + (X – M) Total (in billions of dollars) Per Person (dollars) Percent of Total Gross Domestic Product (GDP) $13,247 $44,156 100% Consumption 9,269 30,896 70 Investment 2,213 7,377 17 Government Purchases 2,528 8,247 19 Net Exports -763 -2,543 -6 Source: U.S. Department of Commerce, Mankiw
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Net Domestic Product (NDP) • NDP: is the market value (GDP) of all final goods and
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This note was uploaded on 12/20/2010 for the course AEM 25 at Cornell University (Engineering School).

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Nat Inc Accts and - Ecological Economics Ecological economics is an attempt to help rectify the tendency to ignore humans in ecology while at the

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