This past week the US Commerce Department released its early estimates for US GDP for the 1st Quarter 2021, January through March. If we are to believe the numbers, the US economy grew a respectable 6.4% during the period. But did it really? And does it represent a strong recovery underway? Or just a rebound, as the economy reopens in the services sector; and once the reopening concludes, will the economy flatten out again—as it did with last summer’s 2020 partial reopening that collapsed in late 2020? The first thing for readers to understand is the 6.4% is not really 6.4% for the first three months of 2021. The US is one of the few countries that reports its GDP figures in an ‘Annual Rate’ (AR) percentage. Most other advanced economies do not.
Gross Domestic Product
The row about ecological limits to growth is back with a vengeance. On one side are those who are deeply sceptical about the idea of ‘infinite growth on a finite planet’. They argue that to be sure of offering a good life for all within planetary boundaries, we need to kick our addiction to consumption growth (in wealthy countries at least). These ‘green growth sceptics’ include those advocating for ‘degrowth’, ‘prosperity without growth’, ‘steady state economics’, ‘doughnut economics’ and ‘wellbeing economics’. In the opposite corner are ‘green growth’ advocates who believe that the historical relationship between GDP and environmental impact can be not just weakened but effectively severed. For green growthers, the key to maintaining a habitable planet is decoupling — reducing the environmental impact associated with each pound or dollar of GDP.