From GDP to Real Feel GDP: behind on GDP, Europe is now ahead of the United States in monetary well-being

The measurement and perception of growth are often opposed to each other and indeed the growth of GDP does not necessarily reflect the change in the standard of living that is perceived by the population. A “real feel” GDP indicator aims to correct this discrepancy by valuing the monetary dimension of aggregated national well-being from information on the diffusion of growth within the population and household survey data relative to life satisfaction.

Applied to Europe and the United States, this Real Feel GDP indicator sheds new light on the comparative trends of the two continents. While the GDP of the United States has tripled since 1980, the Real Feel GDP of the United States, as thus can be estimated, would have remained almost stable over the same period. Conversely, with the exception of recent years, in most European countries, GDP per capita and Real Feel GDP have evolved in parallel, so that in 2017, Europe now exceeds the United States in aggregated monetary well-being terms.

In addition, economic crises last longer measured by Real Feel GDP: ten years later, European Real Feel GDP still had not recovered to its level before the 2008 financial crisis, unlike GDP which took only two years to achieve the same path. Within Europe, in terms of Real Feel GDP, Germany returned to its pre-crisis level of GDP in 2011, unlike France which had to wait until 2017.