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The end of economic growth? A contracting threshold hypothesis

  • Lawn, Philip
  • Clarke, Matthew
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    This paper argues that GDP growth in both developed and developing countries has associated costs that can outweigh the benefits and thus reduce sustainable well-being. This conclusion is based upon the findings of empirical applications of the Genuine Progress Indicator (GPI) to a range of countries in the Asia-Pacific region. The studies conducted on seven Asia-Pacific countries indicate that, in the case of five of the seven nations, more recent GDP growth has reduced the sustainable well-being experienced by the average citizen residing within them. Moreover, the threshold point at which the costs of GDP growth outweigh the benefits appears to be contracting (i.e., occurring at a much lower per capita level of GDP). This paper therefore introduces a new contracting threshold hypothesis: as the economies of the Asia-Pacific region and the world collectively expand in a globalised economic environment, there is a contraction over time in the threshold level of per capita GDP. As a consequence, the threshold point confronting growth late-comers (i.e., developing countries) occurs at a much lower level of sustainable welfare than what wealthy nations currently enjoy. The consequences of this for developing countries are clearly significant and require a new approach to economic development.

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    File URL: http://www.sciencedirect.com/science/article/B6VDY-50FCTKT-2/2/d044159f5ab2e44eaef4d9308b927a51
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    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 11 (September)
    Pages: 2213-2223

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    Handle: RePEc:eee:ecolec:v:69:y:2010:i:11:p:2213-2223
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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