Abstract
Discussions of macroeconomic theory usually begin with a few comments about national income accounting. The family of aggregate measures, of which gross national product (G.N.P.) is the most notable, is introduced and we are told how national income can be measured in three different ways. This much is uncontentious and even a little boring. What does cause concern, however, is the suggestion, either implied or stated explicitly, that G.N.P. is an indicator of ‘national welfare’. G.N.P. is a measure of the market value of goods and services produced by the economy in a particular time period, normally one year. Non-marketed goods and services of positive value, such as housework and gardening, are ignored. Expenditures on defence, police and other items which may be necessary for the provision of welfare but do not provide welfare themselves are included. No notice is taken of the distribution of G.N.P. since one pound’s worth of product is assessed equally regardless of who receives it. Finally, and most relevant for our purposes, the pollution caused by the production of G.N.P. is not registered despite its obvious relevance to ‘national welfare’. Indeed, if an increase in pollution leads to higher laundry bills and more expenditure on repairing perished materials, then G.N.P. will be seen to rise as a result of the increase in pollution.
This is a preview of subscription content, log in via an institution.
Preview
Unable to display preview. Download preview PDF.
Author information
Authors and Affiliations
Copyright information
© 1972 Peter A. Victor
About this chapter
Cite this chapter
Victor, P.A. (1972). The Macroeconomic Analysis of Pollution. In: Economics of Pollution. Macmillan Studies in Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-01531-3_3
Download citation
DOI: https://doi.org/10.1007/978-1-349-01531-3_3
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-13618-8
Online ISBN: 978-1-349-01531-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)