Hooray for GDP!
Should raising the growth rate of GDP per capita be a policy goal of governments in general, and of the British government in particular? Many people would say no, for the following reasons: 1) GDP is hopelessly flawed as a measure of welfare; 2) Growing GDP is pointless since most people don’t benefit; 3) Raising GDP per capita is pointless as it doesn’t make people any happier; and 4) The planet is finite, so further growth of GDP (at least in rich countries) is not feasible anyway. I discuss and reject all four of these objections. I urge the LSE Growth Commission to focus its efforts on policies to increase the growth rate of GDP per capita in the medium and long run.
6 August 2012 Paper Number CEPOP30
This CEP occasional paper is published under the centre's Growth programme.