Well, everyone knows that GDP measures a nation’s economic performance and social progress. What this commission presupposes is: maybe it doesn’t.

Joseph Stiglitz, Amartya Sen and pals recently finished the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP, or, the report)- commissioned by French President, Sarkozy, a couple of years ago.  You can read about it here and  here and you can full report here.

When the chairs of the economics departments at Harvard and Columbia (both are also Noble-Prize winning economists)  get together to analyze the way we measure our economic progress, it seems important.

The goal of the report:

The Commission’s aim has been to identify the limits of GDP as an indicator of economic
performance and social progress, including the problems with its measurement; to
consider what additional information might be required for the production of more
relevant indicators of social progress; to assess the feasibility of alternative measurement
tools, and to discuss how to present the statistical information in an appropriate way.

The first recommendation of the report is to look at income and consumption rather than production as the main indicators of well-being within a nation.   Hopefully, this report is a step in the right direction toward using indicators that more effectively measure our well-being and will assist policy makers in creating policies that take more into account than the gross production of a nation.

Perhaps most interestingly, the report makes an attempt to include indicators of social capital into the equation. Finally.

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Published in: on September 29, 2009 at 9:10 pm  Leave a Comment  
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