Abstract
This paper addresses some of the issues currently surrounding natural resource depletion in national income accounting and makes an argument that user costs associated with exhausting natural resources ought not be treated as costs of production and subtracted from net national product in order to arrive at a “net” net national product. Depletion charges should be reflected in income accounts only to the extent that they are actually taken, in which case they should be treated as saving, rather than as a cost. Purely notional disappearances of natural resources should be recorded in off-balance sheet accounts or satellite accounts, not income statements. An earlier version of this paper was presented at the WSSA conference in Albuquerque, NM in April 1997.
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