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.
Growth models; Heterogeneity of preferences; Welfare; Product accounts and wealth;
- D64: Altruism • Philanthropy
- D91: Intertemporal Household Choice • Life Cycle Models and Saving
- J22: Time Allocation and Labor Supply
- O41: One, Two, and Multisector Growth Models
Emmanuel Thibault, “Is GDP a Relevant Social Welfare Indicator? A Savers-Spenders Theory Approach”, Japanese Economic Review, vol. 68, n. 3, September 2017, pp. 333–351.
Emmanuel Thibault, “Is GDP a Relevant Social Welfare Indicator? A Savers-Spenders Theory Approach”, TSE Working Paper, n. 16-651, May 2016.
TSE Working Paper, n. 16-651, May 2016