Source BEA Savings and Investment by Sector
Brief Definition: Adjusted net saving is derived from the standard national accounting measure of gross saving by making four adjustments: (i) consumption of fixed capital is deducted to obtain net national saving; (ii) current public expenditure on education is added to account for investment in human capital; (iii) estimates of the depletion of a variety of natural resources are deducted to reflect the decline in asset values associated with extraction and depletion; (iv) deductions are made for damages from carbon dioxide and particulate emissions. The indicator is then computed by dividing ANS by GNI.
Adjusted net saving measure the change in value of a specified set of assets, excluding capital gains. If a country’s net saving is positive and the accounting includes a sufficiently broad range of assets, economic theory suggests that the present value of social welfare is increasing. Conversely, persistently negative adjusted net saving indicates that an economy is on an unsustainable path.
For developed and developing countries, adjusted net saving should not be negative. This constitutes a necessary condition for sustainability.