Sustainability and Technical Progress

A rigorous model connects together the following three basic concepts: (1) “sustainability”— meaning the generalized future power of an economy to consume over time; (2) “Green NNP”— meaning a current measure of national income that subtracts off from GNP not just depreciation of capital but also, more generally, depletion of environmental assets evaluated at current efficiency prices; (3) “technological progress”— meaning a projection onto the future of the so‐called “Solow residual”. A simple general formula is derived. Some crude calculations suggest a possibly strong effect of the residual, which hints that our best present estimates of long‐term sustainability may be largely driven by predictions of future technological progress.