BASIC ECONOMIC INDICATORS AND ECONOMIC WELL-BEING

Abstract

The paper reviews some of the basic economic indicators that reflect the three essential macroeconomic problems (economic growth, inflation and unemployment) and correlates them with economic well-being expressed
through the happiness index. Having in mind the basic premise of the economy as a science to manage limited resources in order to meet unlimited human needs, the question that arises is when people feel well, have a feeling that they have "quality" life, and when they feel happy. Although the question of well-being has been of interest to economic science since its inception, the answer to what makes people happy is more of a philosophical than an economic question and difficult to measure and answer. Well-being depends on a huge number of economic, but also on a number of non-economic variables. In addition2 to the economic indicators that show the level of economic development, the standard of living, employment and unemployment, the poverty rate and the inflation rate, an indicator is needed that will show the personal perception of quality of life. The level of well-being and happiness have a strong expression of a subjective experience and are determined in addition to economic, also by other non-economic factors (psychological, sociological, philosophical, cultural, etc.). Taking into account the complexity of the subject and the spatial limitation of a paper of this kind, a regression analysis was done in it, using data on GDP per capita, PPP (current international $),Inflation, consumer prices (annual %), Poverty gap at $1.90 a day (2011 PPP) (%),and Happiness Index for 67 countries in the world. The analysis is based on data from 2019 as the last year for which data is available, and in which there were no restrictions of any kind.