GAGI: A Gini-Adjusted GDP-per-Capita Index for Distribution-Aware Macroeconomic Welfare Monitoring
Researchers have developed a new economic index called the Gini-Adjusted GDP per Capita Index (GAGI) to better monitor macroeconomic welfare. GAGI accounts for income distribution and inflation, offering a more nuanced view than traditional GDP per capita. Initial application to G7 economies from 2010-2026 reveals a growing divergence between welfare-adjusted prosperity and headline GDP growth, particularly after 2022. The authors argue that GAGI is crucial for identifying distributional harm caused by factors like automation, even when aggregate growth appears strong. AI
IMPACT Highlights potential for automation to cause distributional harm even with strong GDP growth.