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Is GDP a Relevant Social Welfare Indicator? A Savers—Spenders Theory Approach

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  • Emmanuel Thibault

    (Toulouse School of Economics (CDED and University of Perpignan))

Abstract

The use of GDP as the main index of progress and welfare of a country has been the subject of a long debate among economists. Using and extending the savers-spenders theory, we analyse the theoretical relationship between GDP and the welfare of a society. This analysis is undertaken using several different overlapping generations models which all take into account the great heterogeneity of consumer behaviour observed in the data (different labour supply choices, different degrees of altruism and/or different degrees of impatience to consume). The results indicate that GDP (per capita) is often a relevant index and is always a decent social welfare indicator.

Suggested Citation

  • Emmanuel Thibault, 2017. "Is GDP a Relevant Social Welfare Indicator? A Savers—Spenders Theory Approach," The Japanese Economic Review, Springer, vol. 68(3), pages 333-351, September.
    • Handle: RePEc:spr:jecrev:v:68:y:2017:i:3:d:10.1111_jere.12116
    DOI: 10.1111/jere.12116
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    More about this item

    Keywords

    D91; D64; J22; O41;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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