Hooray for GDP!

Nicholas Oulton

CEP Occasional Papers from Centre for Economic Performance, LSE

Abstract: Should raising the growth rate of GDP per capita be a policy goal of governments in general, and of the British government in particular? Many people would say no, for the following reasons: 1) GDP is hopelessly flawed as a measure of welfare; 2) Growing GDP is pointless since most people don't benefit; 3) Raising GDP per capita is pointless as it doesn't make people any happier; and 4) The planet is finite, so further growth of GDP (at least in rich countries) is not feasible anyway. I discuss and reject all four of these objections. I urge the LSE Growth Commission to focus its efforts on policies to increase the growth rate of GDP per capita in the medium and long run.

Keywords: GDP; welfare; inequality; happiness (search for similar items in EconPapers)
JEL-codes: D63 E61 O47 (search for similar items in EconPapers)
Date: 2012-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Hooray for GDP! (2012)
Working Paper: Hooray for GDP! (2012)
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