Measuring economic performance and social progress

Measuring Economic Progress

Economists have been inquiring into the nature and causes of the wealth of nations for centuries,1 but the regular and systematic construction of official quantitative measures of relative economic progress is a phenomenon of recent decades. A key role in this transformation was played by Colin Clark, who held that ‘[c]omparisons of economic welfare between one community and another, one econom...

Discussion of Measuring Economic Progress

One of the strongest motives in life is the desire to ‘keep up with the Joneses’. In economic debate, this tendency is reflected in a concern with international rankings of various kinds. These rankings are frequently used to bolster a variety of spurious arguments. A typical form of the argument is ‘Australia has declined relative to country X on scale Y, and we should therefore adopt policy Z...

Measuring Social Capital and Its Economic Impact

This paper assesses the quality of various micro level measures of social capital. It begins by examining a simple model of social capital accumulation in which households acquire social capital by devoting resources to forming relationships with other households. Through these relationships households acquire access to social resources which raises utility for any level of consumption. Tests o...

Social Culture and Economic Performance

The connection between obtaining higher paying jobs and undertaking some seemingly irrelevant activity is interpreted as “social culture.” In the context of a society trying to adopt a new technology, I show that by allowing the firms to give preferential treatment to workers based on some “cultural activity,” the society can partially overcome an informational free-riding problem. Therefore, s...

Social Divergence and Economic Performance