GDP, Welfare, and Growth

There has been much discussion lately about the use of GDP as an indicator of societal well being. In particular, Nicolas Sarkozy set up a commission in 2008, chaired by Joseph Stiglitz, to see if the present measures properly reflect societal well being (see page 41 of the text).

1. Explain why GDP might not be a good measure of welfare.
2. Economic growth, the increase in GDP, is an aim of all governments. Summarize the benefits and costs of economic growth.
3. Explain how these costs and benefits might differ between a developing country and a developed country.

Websites

You can find the commission’s report on existing approaches to measuring socio-economic progress at:

https://ec.europa.eu/eurostat/documents/118025/118123/Fitoussi+Commission+report

The Centre for Partnership Studies programs focus on promoting human rights and nonviolence, gender and racial equity, childhood development, and new metrics that demonstrate the financial contribution of the work of caring.

https://centerforpartnership.org/articles-interviews-speeches/

The New Economics Foundation aims to challenge mainstream economics thinking and has a whole section dedicated to ‘macroeconomic issues’ and one specifically about ‘well being’. See:

https://neweconomics.org/search/issue/macroeconomics

https://neweconomics.org/search?issue=wellbeing

The UNDP produces the Human Development Index and an annual Human Development Report available at:

http://hdr.undp.org/en/statistics/

The World Bank also has a site dedicated to research into Macroeconomics and Growth:

https://data.worldbank.org/topic/economy-and-growth?view=chart

Another useful site is the Center for Global development at:

https://www.cgdev.org

https://www.cgdev.org/topics/sustainable-development-finance