On Sat, 27 Apr 1996, Greg Ehrig wrote:
> I am sorry, but this is not true by any measure that I know of--
> unless you have a really creative definition of "popular" :->
> According to the Statistical Abstract of the United States* (with no
> known affiliation to any of the groups you have listed), the average
> growth rate for the industrialized countries (US, Canada, France,
> Germany, Italy, UK, Australia, Japan, South Korea, New Zealand,
> Taiwan) all showed consistent upward growth in their international
> economic indexes from 1984 to 1994. The rate of growth varied
> from year to year, and occasionally went negative in some countries
> in some years. Overall, though, growth has continued to be the norm,
> recession the exception. Average industrialized growth has been
> around 3-4 percent per year. varying widely by country. GDP per
> capita also showed consistent gains of around 1-2% per year. What
> is unmistakable is the fact that there is _no_ evidence for absolute
> losses for any significant length of time.
Two quick observations.
First, both total GDP and per capita GDP measures are biased
measures of the experience of the population of a country. Obviously, a
10% increase in the income of an individual in the top quintile of the
income distribution has more weight than a 10% increase in the income of
an individual in the bottom quintile. Growth in median GDP would be a
better measure of the population's experience regarding changing national
income.
Second, GDP is obviously not designed as a measure of welfare. It
is simply the market value of newly produced goods and services. GDP
growth does not distinguish between increasing output to fight a war,
increasing output so more people can go to Disneyland on their vacation
vacation, or increasing output so fewer children go to sleep hungry and go
to schools that are dysfunctional. The GPI was developed in an effort to
provide a market measure where more 'goods' were added and more 'bads'
subtracted, and has per capita GPI in the US stagnant or declining since
the ealry seventies. And whether or not it is successful (I haven't
settled this to my personal satisfaction yet, so I will offer no arguments
for or against the specifics of the index), it is an effort to measure
welfare as opposed to total market transactions of a given type. If you
wish to claim it gives a false picture, you need a competing welfare
measure to support the claim.
Virtually,
Bruce R. McFarling, Newcastle, NSW
ecbm@cc.newcastle.edu.au