Comparative Growth Rates of ‘Measurable Economic Welfare’: Some Experimental Calculations

Abstract

This paper is a brief description of some estimates made recently for the OECD of comparative growth rates of ‘measurable economic welfare’ in thirteen advanced countries. It is hoped that the full details of the calculations and results will be published in due course. It contains the results and summarises some of the key conceptual issues that seem to arise in any attempt to make such international comparisons. As will be clear from what is said below, there is room for major differences of opinion concerning the best manner in which to carry out the calculations in question.¹ No pretence is made here that these conceptual issues have been solved, and the present paper is, hence, chiefly of an experimental kind, the object of the experiment being to show how the results are affected by different answers to the conceptual questions raised. More particularly, the object of this study is to experiment with measures of rates of economic growth over the last twenty years (1950–52 to 1971–73 to be precise) for a number of countries that differed from the conventional GNP growth rates in that allowance was explicitly made for what appeared to be two major elements in ‘measurable economic welfare’. These were (i) changes in total leisure time available; and (ii) changes in income distribution. The reasons for selecting these items are as follows: very detailed calculations have been made by Nordhaus and Tobin of ‘measurable economic welfare’ in the USA over the period 1929 to 1964.²