Does Annual Real Gross Domestic Produce per Capita Overstate or Understate the Growth of Individual Welfare over the Past Two Centuries?
By Hendrik Van den Berg
This article appeared in the Fall 2002 issue of The Independent Review
A common theme in the economic development literature has been that the growth in average annual real GDP per capita overstates the improvement in human welfare. The fundamental flaw of that measurement, however, is that it fails to measure the lifetime welfare of individualsleading it to understate improvements in human welfare.