What alternative is there to GDP? Gross Domestic 'Problem' Animation 2 weeks ago   03:19

Share
EURACTIV
Gross Domestic Product, which measures the value of goods and services produced or provided in any given year, is the best-recognised measure of economic performance in the world. For many, a rise in economic growth - as measured by GDP is shorthand for a rise in living standards and an increase in well-being. However, GDP has severe limitations as a human development indicator, as even one of the founders of the GDP concept Nobel Prize winning economist Simon Kuznets realised. The welfare of a nation can scarcely be inferred from a measure of national income, he wrote in a 1934 report to the US congress. If the GDP is up, why is America down? Distinctions must be kept in mid between quantity and quality of growth, between costs and returns and between the short and the long run. Goals for more growth should specify more growth of what and for what? GDP measures all economic activity fighting crime, natural disasters and environmental depletion - whether or not it contributes to an individuals well being or a communitys progress. This can produce some perverse results.

This video was produced by the European Commission in 2007.

Comments 1 Comments

Random Nonsense
Good; useful for the Edexcel gCSE in Busienss and Economics.
Add Reply

Gross Domestic 'Problem' Animation What alternative is there to GDP? 2 weeks ago   02:10

Share
Gross domestic product is arguably the best-known statistic in the contemporary world, and certainly amongst the most powerful. It drives government policy and sets priorities in a variety of vital social fields - from schooling to healthcare. Yet for perhaps the first time since it was invented in the 1930s, this popular icon of economic growth has come to be regarded by a wide range of people as a 'problem'. After all, does our quality of life really improve when our economy grows 2 or 3 per cent? Can we continue to sacrifice the environment to safeguard a vision of the world based on the illusion of infinite economic growth?

In Gross Domestic Problem, Lorenzo Fioramonti takes apart the 'content' of GDP - what it measures, what it doesn't and why - and reveals the powerful political interests that have allowed it to dominate today's economies. In doing so, he demonstrates just how little relevance GDP has to moral principles such as equity, social justice and redistribution, and shows that an alternative is possible, as evinced by the 'de-growth' movement and initiatives such as transition towns. More info at www.globalreboot.org