Introduction

Abstract

While current economic discourse tends to focus on GDP and its growth, there is an older tradition in economics of assessing the wealth of a nation. This book builds on this tradition by defining the components of wealth (produced, natural, human, intellectual and institutional capital, and net foreign assets) and considers how the management of this portfolio can lead to increasing social welfare. Four factors have increased the salience of wealth: a financial crisis centred on the implosion of balance sheet positions, the subsequent emphasis on the distribution of wealth within societies, significant progress in the measurement of wealth, and concerns about the natural capital that is humanity’s common endowment. The chapters in this book span concepts, theory, and empirical work, including research on historic wealth creation and destruction, the economic characteristics of the components of wealth, and the means of managing wealth in order to sustain social welfare.