In this paper we set out a national balance sheet structure designed to show the assets and liabilities of people currently alive and those of future generations. Assets include discounted future labour income and natural and produced capital. The estimated discounted value of future consumption is shown as a liability as are bequests from people currently alive to future generations- with the latter computed as a residual. The framework allows us to define a sustainable economic path as one where the the value of bequests to future generations is at least as large as the value of naturally-occuring capital in the economy. It allows us to consider the issue of intergenerational equity from the perspective whether people currently alive are consuming too much to assets equal to the natural capital stock for their descendents. The framework is illustrated by means of application to the United Kingdom.
Keywords: National Balance Sheet; Sustainability; Intergenerational Equity
Biography: Dr Weale is currently an external member of the Monetary Policy Committee of the Bank of England after working as Director of the National Institute of Economic and Social Research and, before that, teaching economics in Cambridge University. He has worked at length on a wide range of issues connected with national accounting, including questions concerning the concept of income and the treatment of use of exhaustible resources in an open economy.