The Growth Delusion

Channel News Asia, 2019

Nobel Prize winner Simon Kuznets, widely credited for proposing the idea of GDP decades ago, noted GDP considers only economic production and not human well-being. Sadly, people routinely conflate the two, with troubling consequences that focus on economic outputs to the detriment of social and environmental issues. Take United States. During 2008–2019, it has the longest period of economic expansion in history. Despite this growth, it is now experiencing highest levels of economic inequality in 50 years, enduring a prolonged opioid crisis, increasing suicide rates, and declining lifespans for many sectors of society. Winners of GDP horse race attract foreign investment and command greater geopolitical attention. In India, Narendra Modi rode to power promising higher GDP growth. Its 7% GDP growth rate was later said by its former Chief Economic Advisor to be an overestimate by 2%. China is facing similar questions of its quality of economic development and overestimation of its GDP growth. See our views on GDP and importance of complementing it with other substantive indices on #sustainability and #social and #environmental progress. See our analysis.

International Review of Economics, 2014

Gross domestic product has become the comparative benchmark for the wealth and growth rates of nations. As a standardized measure, its success is unparalleled, but it excludes many inputs, such as environmental and social conditions that are increasingly sought by analysts as well as asset owners with very long time horizons. The author provides a concise history of GDP, which offers fertile ground for the consideration of future changes to its use and to the use of other inputs in the valuation of stocks and stock markets.

The objective of this article is to demonstrate the need to abandon the calculation of the Gross Domestic Product (GDP) which computes all financial transactions whether they are beneficial to the population or not with its replacement by the GPI (Genuine Progress Indicator) to measure the economic progress and social well-being of a nation. This substitution is justified by the conclusion that the rise in GDP in several countries shows no correlation with the increase in the welfare of the nation, quite the contrary. GPI, in turn, considers the welfare and environment parameters using the same methodology for calculating GDP, but, unlike this, it subtracts costs due to factors such as crime, pollution, environmental degradation and compromise of natural resources and systems, besides adding to the calculation items such as domestic and voluntary work that do not occur in the calculation of GDP. The justification for replacing GDP by GPI is presented in this article.

Emerging Economy Studies, 2021

Inclusive development policies and comprehensive strategies are extremely critical aspects of the holistic progress of a nation. The measurement of considerable progress through the indicator/indicators is equally important. What if the selected indicator(s) are inappropriate? It can mislead people and policymakers. That is exactly what is happening to gross domestic product (GDP) as an indicator for measuring the overall progress of any nation. Through this academic article, an attempt has been made to address the following questions. Why do social, environmental, and human-centric indictors reveal an altogether different position concerning the health of the economy? Are we making deliberate mistakes while considering GDP as a gospel indicator for each and everything? Does it reflect the welfare aspects of human beings? Does it accurately reflect the well-being of people? The prolonged followed GDP-driven policies are inadequate for measuring the overall progress of a nation. The progress of a nation cannot be accurately reflected through GDP as an indicator. After an extensive review, the authors found that GDP was intentionally developed for measuring only economic activities which cannot be equated with social or human well-being. The possible outcomes of GDPdriven policies have been reflected through various human, social, and environment-centric indicators, which thoughtfully provide ample grounding to authors to fulminate against the philosophical notion of GDP as a universal indicator for measuring overall national progress/human well-being. This article can add to the literature of "why happiness movement." This article can provide sufficient theoretical grounds to move beyond GDP and look for some other holistic indicator(s).

For more than half a century, Gross Domestic Product (GDP) has been viewed as the dominant indicator of economic and social progress. Its visibility and increasingly widespread use have contributed to the incorrect identification of economic growth (that is, increased GDP) with improved well-being for all. GDP’s supremacy as an indicator is being challenged, however: around the world, its limits are being questioned and solutions proposed for overcoming them. Given the broadly accepted idea that indicators affect reality, changing them is a high-stakes issue. Potentially, re-fashioning progress indicators may change our representations of the world, redefine our ends, and reinvent the means by which we pursue them. Such a change is part of a complex transformation currently taking place in our economic, social, political ideological systems. The four sections of this paper put forward the argument that the debate over new progress indicators is symptomatic of an historical turning point, and for this reason deserves careful attention. The first section reviews the specific context in which national accounting was established as an economic policy tool rooted in post-war social compromises. The second section discusses the three major justifications for the search for alternative indicators: social goals which economic growth captures inaccurately or not at all; the gap between economic growth and subjective assessments of «life satisfaction»; and, finally, the complex and urgent issue of the environment. The third section presents a concise overview of existing indicators that claim to supplement or replace GDP, dividing them among the three categories of justification described above and demonstrating the inextricable link between methodological and normative questions. From this follows the fourth and final section, which addresses the core questions raised by GDP and the problem of replacing it, and examines the hypothesis that our societies are at an historical turning point in which new compromises are emerging, in ways not yet entirely discernable to social actors.