The end of economic growth? A contracting threshold hypothesis

Philip Lawn, Matthew Clarke

    Research output: Contribution to journalArticlepeer-review

    29 Citations (Scopus)

    Abstract

    This paper argues that GDP growth in both developed and developing countries has associated costs that can outweigh the benefits and thus reduce sustainable well-being. This conclusion is based upon the findings of empirical applications of the Genuine Progress Indicator (GPI) to a range of countries in the Asia-Pacific region. The studies conducted on seven Asia-Pacific countries indicate that, in the case of five of the seven nations, more recent GDP growth has reduced the sustainable well-being experienced by the average citizen residing within them. Moreover, the threshold point at which the costs of GDP growth outweigh the benefits appears to be contracting (i.e., occurring at a much lower per capita level of GDP). This paper therefore introduces a new contracting threshold hypothesis: as the economies of the Asia-Pacific region and the world collectively expand in a globalised economic environment, there is a contraction over time in the threshold level of per capita GDP. As a consequence, the threshold point confronting growth late-comers (i.e., developing countries) occurs at a much lower level of sustainable welfare than what wealthy nations currently enjoy. The consequences of this for developing countries are clearly significant and require a new approach to economic development.

    Original languageEnglish
    Pages (from-to)2213-2223
    Number of pages11
    JournalEcological Economics
    Volume69
    Issue number11
    DOIs
    Publication statusPublished - Sep 2010

    Keywords

    • Asia-Pacific region
    • Economic growth
    • GPI
    • Threshold hypothesis

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