Time Series Characteristics of Canada’s Beyond GDP Indicators

Abstract

Abstract This paper investigates the time series properties of three Beyond-Gross Domestic Product (BGDP) measures in Canada, namely, gross national disposable income (GNDI), human development index (HDI), and index of economic freedom (IEF), along with Gross Domestic Product (GDP). GDP is the most used metric for measuring economic growth and is susceptible to influence by numerous factors beyond the value of production measured by GDP. BGDP measures have been suggested in the literature as alternative indicators that can capture economic progress in a more holistic way (Kimmerer, 2020). This paper generates and evaluates the descriptive statistics of GDP and BGDP indicators. To evaluate the potential existence of a long run relationship between GDP and BGDP indices, we performed Augmented Dickey Fuller stationarity and Johansen cointegration tests. The results demonstrate that per capita GDP is cointegrated with the BGDP indicators. Furthermore, this study shows for the first time in the literature that BGDP measures are cointegrated when paired with each other. The paper contributes to the literature by highlighting the time series properties of BGDP indicators in Canada. This insight facilitates understanding the behavior of BGDP measures, thereby further enhancing the use of these measures for econometric studies and policy making. Keywords: Economic growth, Beyond-GDP measures, Disposable income, Human development, Economic freedom, Cointegration.