Just to summarise some of the points already made:
1)GDP growth itself even if it were a proper measure does not entail
that the worst off or even the majority gain. In many countries during the
last decade the gap between rich and poor has widened. Even if there were a
trickle-down effect, crumbs to the poor, this is not necessarily to be
applauded.To the neo-classical welfare theorist if the poor gain 1 cent
while the richest gain 1million from growth this is a Pareto improvement and
to be applauded as a welfare gain. But why would not a slight decline that
resulted in a considerable gain for the worst off and a slight loss for the
richest be preferable?
2) GDP measures all sorts of items that are really negatives, costs of
cleaning up oil spills, expenditures on jails etc. The marketisation of the
economy, I assume this is what Michael means, will lead almost automatically
to growth in GDP. But consider cases where a subsistence agriculture is
replaced by export agriculture. GDP may soar but susbsistence farmers will
now starve to death or face starvation wages as they are driven from the
land, wages which will be added to the GDP and show it as growing.
3) As the last example shows GDP fails to measure many costs adequately
for example a large dam project as in India will not adequately factor in
the social and environmental costs of such a development. The costs of IMF
austerity measures are not subtracted from GDP increases, and one could go
on and on....Far from leaving more for expenditure on the environment an
increase in GDP can represent growth at the expense of the environment in
the first place.
Cheers, Ken Hanly
----- Original Message -----
From: Michael Perelman <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Saturday, April 14, 2001 11:26 AM
Subject: [PEN-L:10209] Re: What is going on?
> And how reliable are the statistics? Doesn't the increased monetization
of an economy almost
> invariably create an upward bias in the increased the measured rate of
growth.
>
> Also, thank you Ravi for joining in.
>
> [EMAIL PROTECTED] wrote:
>
> > > Brad DeLong wrote:
> > > >Rates of growth of GDP per capita, India:
> > > >
> > > >1950-1980 1.1% per year
> > > >1980-1990 3.3% per year
> > > >1990-2000 4.2% per year
> >
> > >>At the pace of the last decade, India's real productivity is doubling
every seventeen
> > years (compared to a doubling time of 65 years before 1980).<<
> >
> > Doug writes:
> > > Any evidence on how this growth has been distributed? Are the bottom
20-40% any better
> > off, or is it mainly captured by a thin urban middle class and the IT
sector?<
> >
> > also, to what extent did the rise of income get siphoned off to other
countries (e.g.,
> > Swiss banks, stockholders of TNCs)?
> >
> > ---------------------------------------------
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>
> --
>
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail [EMAIL PROTECTED]
>
