Criticism of GDP has been mounting for years, with economists recommending that we demote it as a measure of progress or replace it with a dashboard of indicators that better represent living standards. Several ideas for better measures have been proposed, inspired by the work of a commission set up in 2008 by former French president Nicolas Sarkozy, which asked economists including Nobel laureates Joseph Stiglitz and Amartya Sen to come up with alternatives to GDP.
The WEF proposes a measure of its own, dubbed the “inclusive development index.” While it takes into account growth, as measured using GDP per capita, employment, and productivity, it also incorporates several other metrics, including gauges of poverty, life expectancy, public debt, median income, wealth inequality and carbon intensity. The index also considers investments in human capital, the depletion of natural resources, and damage caused by pollution.
This broader index of economic progress and wellbeing shows how the traditional measure of growth often falls short. In the past five years, almost a third of the 103 countries covered by the WEF index experienced a decrease in their inclusive development scores even as GDP increased. Among the 29 advanced economies in the sample, all but three have experienced economic growth over that period, but most—16 out of 29—saw their measures of social inclusion deteriorate, according to the WEF. Income inequality has risen or remained stable in 20 of these advanced economies, and poverty has increased in 17.
No comments:
Post a Comment