The Relationship between Genuine Saving and Net Present Value of Consumption in Iran (1960-2012)

Sustainable development is an essential goal for developing countries, which can be measured by various indices. This paper computes genuine saving for the Iranian economy based on national accounting and examines the relationship between genuine saving and present value of discounted consumption during 1960-2012. The results indicate that genuine saving is mostly negative over the period under study and there is also a negative relationship between genuine saving (as a measure for the nation wealth) and the change in the present value of consumption (as a national welfare index). According to Hartwick’s rule, these findings mean that welfare reduction is a possible outcome in the future.