Relationship Between Economic Growth And Happiness

The famous English novelist Jane Austen once said, â€Å"A large income is the best recipe for happiness I ever heard of† (1894). Even nowadays, it is still generally believed that happiness is related to economic growth and prosperity, although this manner of thinking was attacked by the economist Robert Skidelsky in 2012, quoting a famous paper â€Å"Does Economic Growth Improve the Human Lot?† published earlier by another economist, Richard Easterlin (1974), to support his stance. Skidelsky stated that although there was a continuous rise in GDP per head from 1973 to 2009, there was no corresponding increase in reported levels of life satisfaction. Nowadays, people are starting to think more about the meaning of happiness and the relationship between economic growth and happiness. The relationship between economic growth and happiness may be considered as an inverted U-shape, with the highest point, or peak, of the shape representing a critical point in the relations hip between economic prosperity and happiness. Before reaching the critical point, rising income levels are very significant in increasing the level of an individual’s happiness. When the highest point is reached, it indicates that the basic living requirements, or needs, such as a supply of sufficient food, shelter and basic security have been satisfied. Once this point is exceeded, further economic growth alone no longer automatically increases levels of happiness, and indeed, may even cause an adverse effect in theShow MoreRelatedIndustrialization in the Modern World1357 Words   |  6 Pagesin Europe, America and parts of Asia, economic growth has been the major focus point of most governments. This quest arose because of the desire for higher economic status and political power. 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