Word: gdp
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Dates: during 2000-2009
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...treat it with a numerologist's zeal. When it drops, we assume that grave societal consequences will follow. Macroeconomic policy is formed in its shadow. But now the granddaddy of economic statistics - gross domestic product (GDP) - is under attack. An assortment of economists, psychologists and sociologists are beginning to say that GDP is an imprecise measurement of economic performance that distracts policymakers from more important measures of societal well-being...
...focus on growth can be helpful. It's just that we need to think of the concept differently. "Growth doesn't have to mean more stuff," she says. "Isn't that the point of the report, in a way? That growth doesn't have to mean growth in GDP...
...Economists have long noted imperfections in how GDP - the market value of all goods and services produced in an economy - is calculated. For instance, unpaid work that might benefit society, like raising children, is not included in the calculations. Societal failures, however, often are: the cost of keeping 2 million people in prison boosts the U.S.'s GDP, as does fuel sales, despite the correlation with traffic congestion and pollution. Sustainability is also ignored - a heavily wooded country could see its GDP skyrocket if it turned over all its land to loggers. (See 10 ways your job will change...
...person panel, called the Commission on the Measurement of Economic Performance and Social Progress, makes some concrete suggestions, like looking at household income and wealth rather than national production to avoid the false boost that debt-fueled consumer spending gives to GDP. Nonmarket activities such as raising children, caring for the elderly and housecleaning should be taken into account, the panel says, as should environmental sustainability. But most important, it suggests looking at "soft" economic indicators that are linked to well-being, such as access to education, population health and leisure time...
...Does this mean we should ignore growth altogether? The panel did not come up with a single statistic to replace GDP, in the way that Bhutan - a state of 600,000 people in southeast Asia - has for years used Gross National Happiness as a GDP substitute. Instead, it suggests that countries publish an annual report, much like a corporation does, that includes a range of measurements of well-being...