What do we mean by a country's real income? There are in fact two different approaches here. One, which we address here, is the question of interpreting the existing definition of income. The other is the widespread view that income ought to measure ‘sustainable consumption’. The origin of the idea that income should be a measure of sustainable consumption can be traced back to Hicks (1939).
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Sefton et al. (1996) studied this question.
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