A Tight Connection Among Wealth, Income, Sustainability, and Accounting in an Ultra-Simplified Setting

In theory, and under some quite strong assumptions, there exists a tight quantitative relationship among the following four fundamental economic concepts: (1) “wealth”; (2) “income”; (3)“sustainability”; (4) “accounting”. These four basic concepts are placed in quotation marks here because a necessary first step will be to carefully and rigorously define what exactly is meant by each concept. In this paper, I review what is known about this important four-fold quantitative relationship in an ultra-simplified setting. I identify some basic applications of this simplified economic theory of wealth and income (and sustainability and accounting). While the contents of this paper are expressed at a very high level of abstraction and require many restrictive assumptions, I believe that the fundamental four-fold relationship it sharply highlights is useful for conceptualizing, at least in principle, what is “wealth” and what is its theoretical relationship to “income,”“sustainability,”and “accounting.”