The Puzzle of Relationship between the Economic Growth and Happiness An Inter-Country Analysis

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Yazdan Naghdi
Hamid Amirtaemeh
Soheila Kaghazian


In economic research, the relationship between economic growth and happiness is ambiguous. Happiness does not show a positive or negative dependence on economic growth over time. Based on the theoretical foundations and using interdisciplinary concepts in economics, e.g. political economy, technology philosophy, generalized method of moments (GMM), and data of 153 countries over the period 2000–2018, this paper tries to show that the one-dimensional look at economic growth and ignoring the growth consequences, including emotional gap, environmental degradation, and oligarchy (lack of healthy democracy), have a crucial role in creating growth and happiness. The main purpose of this study is to accept or reject the theory of Easterlin, called the “Easterlin puzzle”. According to Easterlin puzzle, the growth and development of countries do not increase the happiness of the people in those countries. Based on the model estimated in the present study for 153 countries, the theory of Easterlin is not approved, and economic growth has had a small but significant effect on short- and long-run happiness in these countries.

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