Beyond GDP - Measuring the Wealth of Nations

Tina Wenzel

MPRA Paper from University Library of Munich, Germany

Abstract: This work devotes analysis to the consistency of the idea to measure the Wealth of Nations beyond GDP. Looking at the desirability, utility and feasibility of the concept, the main objective is to outline whether a socially and environmentally adjusted GDP would be able to have a real policy effect in the direction of sustainability. Section I discusses the desirability of the issue and suggests that our current paradigm of progress needs serious rethinking, as it rests on teleological presuppositions prevalent in the 17th and 18th century - an antiquated mechanical world view, developed by Descartes and Newton. In this context, the historical ascendency of GDP is discussed, outlining its rise and demise. Section II then discusses the utility of an adjusted GDP. Departing from an analysis of the growth elasticities of poverty (health and literacy), which gives empirical evidence on the insufficient correlation of GDP per capita and living standards, conventional GDP will then be weight against the alternative measures. An environmental adjustment will thereby be found justified on the ground of efficiency gain effects occurring along the allocation of resources and health expenditure among others, suggesting that the conventional GDP is inefficient and an economically irrational model to guide progress. Concerns will however be raised about the possible inflationary effect of a social adjustment, which is politically unfeasible under the current paradigm of progress and requires further research in terms of measurement techniques. Section III then suggests that the feasibility is a political question. Taking the Case study of the failed Green GDP attempt in China, lessons learnt will be formalised on which I conclude with suggestions under which circumstances an adjusted GDP would be able to have a real policy effect in the direction of sustainability.

Keywords: Beyond GDP; Wealth of Nations; Poverty; Elasticity of Growth; Literacy elasticity of Growth; Health elasticity of growth; Gross National Happiness; GNH Index. (search for similar items in EconPapers)
JEL-codes: A10 A14 A20 B2 B20 B22 B23 B5 B50 C1 C10 C5 C54 F0 F00 H00 H8 H83 I1 I15 I18 I3 I31 N4 N40 O1 O10 O2 O21 O35 O38 P4 P41 P43 Q50 Y40 Z1 Z13 Z18 (search for similar items in EconPapers)
Date: 2009-01-01, Revised 2009-02-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/87288/1/MPRA_paper_87288.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:87288

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().