Chapter 2
Measuring the Macroeconomy and Human Happiness
The welfare of a nation can …scarcely be inferred from a measure of national income.
Simon Kuznets (1934)
FOR A NUMBER OF YEARS NOW The United Na-
tions has issued a World Happiness Report that ranks
the World’s countries by how happy and satisfied
with life its citizens claim to be. The rankings are ba-
sed on the results of surveys that directly ask citizens
to assess their satisfaction with life in their respective
countries. In 2020, Finland ranked as the happiest
country, the third straight year it headed the list. Does
this highest level of happiness also imply that Fin-
land’s economy is the best-performing economy in
the world? According to data shown in Table 2.1 on
the right, when we look at the measure called Gross
Domestic Product, or GDP, the people of Luxem-
bourg are, on average, the richest on the planet. But,
according to the United Nations happiness rankings
shown in Table 2.2, Luxembourg is only the tenth-
happiest country. Why is Finland so happy when
average per capita income is only the 14th-highest?
There are many discrepancies between Tabes 2.1
and 2.2. For example, the United States has the fifth-
highest GDP per capita, but in terms of happiness it is
ranked 18th. And, Qatar, the ninth-richest country is
not even among the top 25 happiest countries.
No doubt, you can think of many reasons why the
dollar value of average national production and the
level of happiness do not exactly match. Think of the
popular saying: “Money cannot buy happiness.” That
is probably true. On the other hand, these measures of
happiness and production may simply not be very
accurate. This chapter examines measures of human
well-being and economic performance that econo-
mists and policymakers use to asses our economy and
to judge the effectiveness of macroeconomic policies.
!
1
Table 2.1 – Gross Domestic Product
per capita, 2020; IMF data.Table 2.2 – Rankings from the 2020 World Happiness Report: The Top 25 and Bottom 10.
!
2
Do you find yourself approaching a tight assignment deadline? We have a simple solution for you! Just complete our order form, providing your specific instructions. Rest assured that our team consists of professional writers who excel in their respective fields of study. They utilize extensive databases, top-notch online libraries, and up-to-date periodicals and journals to ensure the delivery of papers of the utmost quality, tailored to your requirements. Trust us when we say that thorough research is conducted for every essay, and our expertise in various topics is unparalleled. Furthermore, we have a diverse team of writers to cover a wide range of disciplines. Be assured that all our papers are created from scratch, guaranteeing originality and uniqueness.
Write my essays. We write papers from scratch and within your selected deadline. Just give clear instructions and your work is done
Check your essay before you submit. See exactly what your professor sees.
See your AI and plagiarism results before your instructor does.Get the exact same report your professor uses. Trusted by 50,000+ students worldwide.
