The NNP and Sustainability in Open Economy: Highlights on Recent World Economy and on Open Economy of Bangladesh

Abstract

This paper discusses the theory of the net national product and, emphasizes on social welfare and sustainable accounting in open economy. It is observed that the world economy following an egalitarian path, the aggregate capital gains being positive is equivalent to the interest rate tending to decrease. This is important for the concept of net national product in open economies. Martin Weitzman gives a foundation for net national product as the stationary equivalent of a wealth maximizing path when there is a constant interest rate and no exogenous technological progress. The NNP should equal the maximum consumption level that can be sustained. The ordinary Hartwick rule gives a sufficient condition for constant consumption in a closed economy with constant population and stationary technology. An attempt has been taken in this paper to discuss the net national product and sustainability in open economy. The paper also highlights the recent world economy and the open economy of Bangladesh.