scholarly journals The (Subjective) Well-Being Cost of Fiscal Policy Shocks

2020 ◽  
Vol 20 (5) ◽  
Author(s):  
Kodjovi Eklou ◽  
Mamour Fall
Keyword(s):  
Economic Growth ◽  
Capital Flows ◽  
Well Being ◽  
Subjective Well Being ◽  
Fiscal Consolidation ◽  
Policy Shocks ◽  
Short Run ◽  
Fiscal Consolidations ◽  
The Cost ◽  
Spending Cuts

Do discretionary spending cuts and tax increases hurt social well-being? To answer this question, we combine subjective well-being data covering over half a million of individuals across 13 European countries, with macroeconomic data on fiscal consolidations. We find that fiscal consolidations reduce individual well-being in the short run, especially when they are based on spending cuts. In addition, we show that accompanying monetary and exchange rate policies (disinflation, depreciations and the liberalization of capital flows) mitigate the well-being cost of fiscal consolidations. Finally, we investigate the well-being consequences of the two well-knowns expansionary fiscal consolidations episodes taking place in the 80s (in Denmark and Ireland). We find that even expansionary fiscal consolidations can have well-being costs. Our results may therefore shed some light on why some governments may choose to consolidate through taxes even at the cost of economic growth. Indeed, if spending cuts are to generate a large well-being loss, they can trigger an opposition and protest against a fiscal consolidation plan and hence making it politically costly.

scholarly journals Adaptation and Loss Aversion in the Relationship Between GDP and Subjective Well-Being

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Matti Hovi ◽  
Jani-Petri Laamanen
Keyword(s):  
Economic Growth ◽  
Loss Aversion ◽  
National Income ◽  
Well Being ◽  
Macro Level ◽  
Subjective Well Being ◽  
Long Run ◽  
Short Run ◽  
The Relationship ◽  
Over Time

Abstract We examine the roles of macro-level adaptation — including social comparison effects becoming more important over time — and macroeconomic loss aversion in the time-series relationship between national income and subjective well-being. Models allowing for these phenomena are applied to cross-country panel data. We find evidence for macroeconomic loss aversion that becomes more important over time: the effects of economic growth become small and statistically insignificant in the long run, whereas the effects of contractions are large and long-lasting. The results are consistent with the Easterlin paradox and point to it being explained by macro-level adaptation to economic growth. Our results highlight the importance of allowing for both dynamics to distinguish long-run from short-run effects and asymmetries to recognize the important effects of contractions. Failing to do the former leads to a misleading impression of the long-run relationship between economic growth and well-being.

Welfare as a Dominant Economic Growth: the Conceptual and Methodological Basis

2020 ◽  
Vol 23 (1) ◽  
pp. 6-12
Author(s):  
Mariana Bil ◽  
◽  
Olha Mulska ◽  
Keyword(s):  
Economic Growth ◽  
Social Protection ◽  
Well Being ◽  
Welfare Economic ◽  
Subjective Well Being ◽  
Methodological Basis ◽  
Absolute Income ◽  
Long Run ◽  
Short Run ◽  
Individual Household

Introduction. Ukraine has achieved significant economic growth in recent decades, which is causally related to changes in the level of economic deprivation at the level of regions and communities. Welfare has no direct casual connection to economic growth, as it also considers aspects such as socioeconomic inequality, environmental degradation, and access to health and education services, and so on. Life satisfaction and other indicators of subjective well-being correlate with short-run income growth, but there is a moderate long-run relationship between well-being and financial determinants. Absolute income as a financial dominant has a central role in determining social welfare in the terms of economic growth. The purpose is to deepen the conceptual and methodological basis of the welfare’s study as a dominant economic growth. The novelty of the paper is based on the selection of theoretical and methodological approaches to the study of the gradient ‘welfare-economic growth’ through the prism of financial dominants (income, savings, level of investment capacity, etc.). It has been proved welfare is a comprehensive indicator that reflects the appropriate level of support of the population on the material, financial, social, cultural, spiritual goods and so on. To use welfare as the dominant economic growth of the country, the need to regulate social standards and state guarantees groups (consumer, socio-infrastructural, social protection, financial, property) has been identified. There are five levels of well-being assessment: individual, household, community, region, state. It has been substantiated that the assessment of well-being based on GDP per capita, which is used in the vast majority of modern research, has significant shortcomings because it does not consider shadow incomes, migration transfers, household living conditions, leisure time, and household income inequality.

scholarly journals Psychocapital and Shangri-Las: How happiness became both a means and end to governmentality

2013 ◽  
Vol 5 (1) ◽  
pp. 36-50 ◽  
Author(s):  
F. Mckay
Keyword(s):  
Economic Growth ◽  
Well Being ◽  
Subjective Well Being ◽  
The Past ◽  
Means And Ends ◽  
History Of ◽  
The Uk ◽  
Mental Well Being ◽  
Politics Of Happiness

In this paper a paradox is revealed in the politics of well-being over the means and ends of happiness. That paradox, in brief, is that although happiness is argued to be the ultimate end of all governmentality, in order to serve as that end, it first needs to be translated into a means for bolstering the economy, for only that way can a teleology of happiness gain a foothold in a world which prioritizes economic growth as an end in itself. To show this the paper gives a history of subjective well-being (SWB) research, and contrasts it with the politics of happiness in the UK, where SWB has in the past decade been translated into a discourse around the psychological wealth of the nation via the concepts of mental capital (MC) and mental well-being (MWB).

scholarly journals The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence Using Subjective Well-Being Data

2018 ◽  
Vol 100 (2) ◽  
pp. 362-375 ◽  
Author(s):  
Jan-Emmanuel De Neve ◽  
George Ward ◽  
Femke De Keulenaer ◽  
Bert Van Landeghem ◽  
Georgios Kavetsos ◽  
...  
Keyword(s):  
Economic Growth ◽  
Well Being ◽  
Subjective Well Being ◽  
Global Evidence

Infrastructure and Economic Transformation in Ethiopia

2019 ◽  
pp. 190-212
Author(s):  
Seid Nuru
Keyword(s):  
Economic Growth ◽  
Capital Accumulation ◽  
Poverty Reduction ◽  
Physical Capital ◽  
Well Being ◽  
Economic Transformation ◽  
Infrastructure Development ◽  
Rail Network ◽  
Development Agenda ◽  
The Cost

Investment in infrastructure has a central role in the development agenda and is critical for supporting economic growth and poverty reduction. Infrastructure affects growth through two channels: directly through physical capital accumulation and indirectly through improvement in productivity. Investment in infrastructure enhances private sector activities by lowering the cost of production and opening new markets. Infrastructure investment in power generation, water, sanitation, and housing improves the social well-being of citizens. This chapter examines the pace and scale of infrastructure development in Ethiopia in the post-1991 period. The unparalleled expansion of infrastructure since the EPRDF came to power in 1991 has had a significant influence on the trajectory of Ethiopia’s economic growth. Investment in infrastructure now accounts for more than 15 per cent of GDP annually. Heavy investments in power, roads, rail network, irrigation, aviation, and logistics have helped to unleash the country’s potential both economically and as a major manufacturing hub in Africa.

scholarly journals Contribution of Islamic Social Capital on Green Economic Growth in Malaysia

2020 ◽  
Author(s):  
Nazrah Abdul Hamid ◽  
Ruhaini Muda ◽  
Md. Mahmudul Alam ◽  
Normah Omar ◽  
Farah Aida Ahmad Nadzri
Keyword(s):  
Economic Growth ◽  
Social Capital ◽  
Well Being ◽  
Policy Implications ◽  
Annual Data ◽  
Green Growth ◽  
Vector Error Correction ◽  
Growth Measurement ◽  
Distributed Lag ◽  
Short Run

This paper studies the relationship between social capital on the green growth in Malaysia, with the aim of ascertaining whether faith based social capital has a role in sustaining economic growth. The study utilizes the annual data over the period of 1970-2015. This study employs the Autoregressive Distributed Lag (ARDL) model and causality using the Vector Error Correction Model (VECM). The findings demonstrate the long and short-run associations between social capital and green growth in Malaysia. The causality only runs in a unidirection from social capital to the green economic growth. The findings have important policy implications for green economic growth measurement to account for social well-being and to fulfil the objectives of Islamic Sharia.

scholarly journals Social capital, economic growth and well-being

2012 ◽  
Author(s):  
Francesco Sarracino
Keyword(s):  
Economic Growth ◽  
Social Capital ◽  
Social Comparisons ◽  
Well Being ◽  
Subjective Well Being ◽  
Long Run ◽  
The Social ◽  
The Relationship ◽  
Over Time

In the long run economic growth does not improve people's well-being. Traditional theories – adaptation and social comparisons – explain this evidence, but they don't explain what shapes the trend of subjective well-being and its differences across countries. Recent research identified in social capital a plausible candidate to explain the trends of well-being. This dissertation adopts various econometric techniques to explore the relationship over time among social capital, economic growth and subjective well-being. The main conclusion is that social capital is a good predictor of the trend of subjective well-being, both within and across countries. Hence, policies for well-being should aim at preserving and enhancing social capital for the quality of the social environment matters.

scholarly journals Detours increase local knowledge—Exploring the hidden benefits of self-control failure

PLoS ONE ◽  
2021 ◽  
Vol 16 (10) ◽  
pp. e0257717
Author(s):  
Christian Dirk Wiesner ◽  
Jennifer Meyer ◽  
Christoph Lindner
Keyword(s):  
Local Knowledge ◽  
Recognition Task ◽  
Well Being ◽  
Self Control ◽  
Subjective Well Being ◽  
Costs And Benefits ◽  
Comparison Task ◽  
Number Comparison ◽  
Control Failure ◽  
The Cost

Self-control enables people to override momentary thoughts, emotions, or impulses in order to pursue long-term goals. Good self-control is a predictor for health, success, and subjective well-being, as bad self-control is for the opposite. Therefore, the question arises why evolution has not endowed us with perfect self-control. In this article, we draw some attention to the hidden benefits of self-control failure and present a new experimental paradigm that captures both costs and benefits of self-control failure. In an experiment, participants worked on three consecutive tasks: 1) In a transcription task, we manipulated how much effortful self-control two groups of participants had to exert. 2) In a number-comparison task, participants of both groups were asked to compare numbers and ignore distracting neutral versus reward-related pictures. 3) After a pause for recreation, participants were confronted with an unannounced recognition task measuring whether they had incidentally encoded the distracting pictures during the previous number-comparison task. The results showed that participants who exerted a high amount of effortful self-control during the first task shifted their priorities and attention toward the distractors during the second self-control demanding task: The cost of self-control failure was reflected in worse performance in the number-comparison task. Moreover, the group which had exerted a high amount of self-control during the first task and showed self-control failure during the second task was better in the unannounced third task. The benefit of self-control failure during number comparison was reflected in better performance during the recognition task. However, costs and benefits were not specific for reward-related distractors but also occurred with neutral pictures. We propose that the hidden benefit of self-control failure lies in the exploration of distractors present during goal pursuit, i.e. the collection of information about the environment and the potential discovery of new sources of reward. Detours increase local knowledge.

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