Structural changes in economic growth and well-being. The case of Italy’s parabola

Maurizio Pugno and Francesco Sarracino

No 2019-04, Working Papers from Universita' di Cassino, Dipartimento di Economia e Giurisprudenza

Abstract: The controversies on the relationship (called ‘gradient’) between the long-run trends of GDP and subjective well-being oppose those who claim that the gradient is positive, to those who argue that it is nil. The possible existence of structural breaks of the gradient within the same country is a challenge to both views. By focusing on the case of Italy, we show that the long-run trends of GDP and of well-being turned from increasing to decreasing, and that the gradient exhibits a rise through two structural breaks. We adopt macro- and micro-economic approaches to explain why the gradient changes. We find evidence consistent with the ‘loss aversion’ hypothesis. In addition, the gradient changed because the erosion of trust in others, the increase of financial dissatisfaction and worsened health hinder well-being independently from income.

JEL-codes: I31 O11 O12 O5 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2019-11
New Economics Papers: this item is included in nep-hap
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Structural Changes in Economic Growth and Well-Being: The Case of Italy’s Parabola (2021)
Working Paper: Structural changes in economic growth and well-being. The case of Italy's parabola (2019)
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