The generational relay race


  • Gylfi Magnússon



Private consumption, public consumption, generations, economic growth.


This article analyzes the development of private consumption, public consumption, national and domestic product in Iceland from 1870 to present times and projects likely changes for the next 50 years. It is established that the later people are born during this period the greater will their consumption be on average. The difference from one generation to the next is very large in the early part of the period analyzed here. It has since shrunk but is still substantial. Children born in the year 2010 can expect that their lifetime private consumption will be 22% larger than their parents and their consumption of public goods 78% larger. Both private and public consumption have increased substantially from one generation to the next but public consumption has grown faster. The article also estimates the value of the Icelandic economy based on its ability to create goods and services and finds that it was 51.100 billion ISK in the year 2011. That is sixty times greater than in the year 1870.

Author Biography

Gylfi Magnússon

Docent Professor of business studies, University of Iceland.



How to Cite

Magnússon, G. (2013). The generational relay race. Icelandic Review of Politics & Administration, 9(1), 21–51.



Peer Reviewed Articles