Is the output growth rate in Nipa a welfare measure

Bibliographic Data

ID9949578
AuthorsJorge Durán (0000-0002-7375-5290, Directorate-General for Regional and Urban Policy, European Commission), Omar Licandro (0000-0002-3581-0551, University of Leicester, UK & IAE-BSE)
Year2024
Volume135
Issue665
Pages119-143
Publication date2024-07-17
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1093/ej/ueae064
OpenAlexW2117524102
LanguageEN
References cited54

This paper shows that, in a dynamic general equilibrium framework, the rate of output growth as measured by national income and product accounts reflects changes in welfare in the precise sense of equivalent variation. The main argument is straightforward. In a two-sector dynamic general equilibrium model of heterogeneous households, recursive preferences and quasi-concave technology, the Bellman equation provides a representation of household preferences over current consumption and investment. When applied to this representation of preferences, a Fisher–Shell true quantity index turns out to be equal to the Divisia index, closely approximated by the Fisher ideal chain index used in national income and product accounts

Consumption (sociology · Divisia index · Econometrics · Economics · General equilibrium theory · Index (typography · Investment (military · Macroeconomics · Mathematical economics · Measure (data warehouse · Measures of national income and output · Microeconomics · National Income and Product Accounts · Product (mathematics · Representation (politics · Statistics · Welfare · Computer Science · Economic Growth and Productivity · Economic theories and models · Fiscal Policy and Economic Growth · Mathematics

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