ABSTRACT
For market resources I think we have a better chance to meet this need. In a recent paper Nordhaus (2007) illustrates how we might do this. He uses macro-data along with oil price information to construct shock indexes for ‘large’ exogenous oil price movements and a ‘surprise’ index to evaluate their relative magnitude.3 His analysis integrates both measures to conclude the US economy is less sensitive to oil price shocks. I believe this is the type of long term perspective Solow called for. Nonetheless, this flow market analysis might benefit, as Solow suggested, from integrating evidence on asset markets. Unfortunately, the record for non-market environmental services and their associated assets has been virtually ignored.
