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Martin Weale: A Democratic Indicator of Economic Growth

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Martin Weale: A Democratic Indicator of Economic Growth

Thursday 26 October

11.30-12.30, R101

The presentation will discuss the development of a democratic measure of economic growth which treats the growth experience of each household in the country equally. The measure is contrasted with current plutocratic growth estimates. These, when measuring economic growth, give more weight to the income growth of household with high incomes than those with low incomes.

It is shown that a coherent democratic price, quantity and value system can be set up structured round the geometric mean of household incomes. These are deflated by a democratic price index as developed by Tanya Flower and Philip Wales. The growth in the resulting quantity measure is shown to be the democratic growth rate. A welfare interpretation of this growth measure, in terms of the growth in the future utility of households is provided, and contrasted with the welfare interpretation of the plutocratic measure. The relationship with the current practice of focusing on median household income is discussed briefly.

Practical problems of extending the approach to national, rather than household income are explained, and the progress made so far is discussed.

Please note this event is open to ONS staff only, any bookings made by non-ONS staff will be cancelled.

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