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

Listed author(s):
  • Thibault, Emmanuel

The use of GDP as the main index of progress and welfare of a country has been the subject of a long debate amongst economists. Using and extending the saversspenders theory recently popularized by Mankiw (2000, AER), we analyze the theoretical relationships 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 behavior observed in the data (different labor 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.

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File URL: https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2016/wp_tse_651.pdf
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Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 16-651.

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Date of creation: May 2016
Handle: RePEc:tse:wpaper:30477
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  2. George J. Borjas, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring.
  3. N. Gregory Mankiw, 2000. "The Savers-Spenders Theory of Fiscal Policy," American Economic Review, American Economic Association, vol. 90(2), pages 120-125, May.
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  9. Laitner, John, 2001. "Secular Changes in Wealth Inequality and Inheritance," Economic Journal, Royal Economic Society, vol. 111(474), pages 691-721, October.
  10. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
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  12. Rangazas, Peter, 1991. "Human capital investment in wealth-constrained families with two-sided altruism," Economics Letters, Elsevier, vol. 35(2), pages 137-141, February.
  13. Mariacristina De Nardi, 2004. "Wealth Inequality and Intergenerational Links," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 743-768.
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  17. Galor, Oded, 1986. "Time preference and international labor migration," Journal of Economic Theory, Elsevier, vol. 38(1), pages 1-20, February.
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  20. Eli Berman & Zaur Rzakhanov, 2000. "Fertility, Migration, and Altruism," NBER Working Papers 7545, National Bureau of Economic Research, Inc.
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