A Nobel-winning economist says it’s time to kill the GDP metrics

[stompix]

For example, if your tax rates stay steady from year to year, but tax receipts fall, then the economy is doing badly no matter what GDP says.

And of course, you have an example when this was happening, right?  

Putting more value on metrics like economic inequality, the deteriorating middle class, environmental degradation, etc. would make places like the US look much worse.

Why the hell should the indicator of how powerful the economy of a country is take into consideration environmental degradation?
That would lead to a series of far more idiotic indexes.
How are you going to quantify this, how are you going to measure it?

You think US will look worse, then how is China going to look? Or India?
Probably because it more virgin forests, Bulgaria will become the new Switzerland  

I would prefer to see people living in moderation, cutting down on unnecessary stuff owned by individual and relying more on natural stuff. I think this is one of the secrets to happiness.

Yeah, I would love to see others doing this. Others!
Natural stuff...Please type the next message by carrier pigeon  

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[squatz1]

For example, if your tax rates stay steady from year to year, but tax receipts fall, then the economy is doing badly no matter what GDP says.

And of course, you have an example when this was happening, right?  

Putting more value on metrics like economic inequality, the deteriorating middle class, environmental degradation, etc. would make places like the US look much worse.

Why the hell should the indicator of how powerful the economy of a country is take into consideration environmental degradation?
That would lead to a series of far more idiotic indexes.
How are you going to quantify this, how are you going to measure it?

You think US will look worse, then how is China going to look? Or India?
Probably because it more virgin forests, Bulgaria will become the new Switzerland  

I would prefer to see people living in moderation, cutting down on unnecessary stuff owned by individual and relying more on natural stuff. I think this is one of the secrets to happiness.

Yeah, I would love to see others doing this. Others!
Natural stuff...Please type the next message by carrier pigeon  

Agree with this.

The issue isn't GDP. It's that we use GDP for, and forget about what is done to increase that GDP. As I said before, GDP increasing isn't always 'more output being produced for more consumers'

It could be caused by natural disasters, some sort of health crisis, warfare, etc.

We use GDP as the end-all be all economic indicator when it can be used as a complement to others.

[UNOE]

For example, if your tax rates stay steady from year to year, but tax receipts fall, then the economy is doing badly no matter what GDP says.

And of course, you have an example when this was happening, right?  

Putting more value on metrics like economic inequality, the deteriorating middle class, environmental degradation, etc. would make places like the US look much worse.

Why the hell should the indicator of how powerful the economy of a country is take into consideration environmental degradation?
That would lead to a series of far more idiotic indexes.
How are you going to quantify this, how are you going to measure it?

You think US will look worse, then how is China going to look? Or India?
Probably because it more virgin forests, Bulgaria will become the new Switzerland  

I would prefer to see people living in moderation, cutting down on unnecessary stuff owned by individual and relying more on natural stuff. I think this is one of the secrets to happiness.

Yeah, I would love to see others doing this. Others!
Natural stuff...Please type the next message by carrier pigeon  

Agree with this.

The issue isn't GDP. It's that we use GDP for, and forget about what is done to increase that GDP. As I said before, GDP increasing isn't always 'more output being produced for more consumers'

It could be caused by natural disasters, some sort of health crisis, warfare, etc.

We use GDP as the end-all be all economic indicator when it can be used as a complement to others.

How does GDP increase with natural disasters, warfare and health crisis? 
You mean because of goverment spending by taking up loans?

Sort of true, but you can easily check the goverment debt as well to see what caused the rise.

[exstasie]

Putting more value on metrics like economic inequality, the deteriorating middle class, environmental degradation, etc. would make places like the US look much worse.

Why the hell should the indicator of how powerful the economy of a country is take into consideration environmental degradation?
That would lead to a series of far more idiotic indexes.
How are you going to quantify this, how are you going to measure it?

I'm not interested in incorporating the above measures into GDP. I'm interested in de-emphasizing the importance of GDP (and economic growth/power) and instead emphasizing other metrics entirely.

Economists perpetually paint a rosy picture of the economy because of continued growth. Meanwhile, wages have been stagnating for decades, the middle class is disappearing, and rising healthcare costs are completely unsustainable over the long term for average Americans. The vast majority of economic growth in the US over the past two decades has been completely swallowed up by Wall Street.

All the focus on GDP obfuscates this reality. All I'm saying is, maybe we shouldn't be focusing on GDP so much. There is too much value placed on growth. We need to start emphasizing other metrics that place value on things that matter to everyday working people.

[Oneandpure]

GDP is most important how to make some country exist with to make their economic become better and increase with higher level at the future, but many countries made mistake by accepting USD as their payment transaction. They have used USD more than twenty years ago but what benefit got by many countries and how many time USD always inflation value year by year.

[hugeblack]

According to Maslow's hierarchy of needs, people are accused of issues that affect them directly, such as salaries, job stability, eating, etc., more than their interest in the environment. Therefore, politicians tend to address the suffering of the middle class and lower living standards instead of environmental degradation or resource depletion.

I think it is normal for the world not to feel a problem because it does not want to measure it, so killing or expanding GDP measures conflicts with some of these desires.

[stompix]

~

Economists perpetually paint a rosy picture of the economy because of continued growth. Meanwhile, wages have been stagnating for decades, the middle class is disappearing, and rising healthcare costs are completely unsustainable over the long term for average Americans. The vast majority of economic growth in the US over the past two decades has been completely swallowed up by Wall Street.

All the focus on GDP obfuscates this reality. All I'm saying is, maybe we shouldn't be focusing on GDP so much. There is too much value placed on growth. We need to start emphasizing other metrics that place value on things that matter to everyday working people.

Well, GDP was never a measure of how good living in a country is...
For example, New Zeeland stands on rank 51 with 200 trillion while Bangladesh is on 289 with 319 trillion....
The GDP of a country can grow simply by an increased population, that's why we have GDP per capita, and then we have GDP PP

The indicator does what is supposed to do, that people use it in a way it is not supposed to be used doesn't mean it's wrong or fake one

The question is, what would be a better indicator?
How would we manage to quantify in numbers wages and expenses and health and happiness?
I've never seen anything like that.

As for that environment stuff, here's an index:
https://epi.envirocenter.yale.edu/epi-topline?country=&order=field_epi_rank_new&sort=asc

But if you think about the environment and you have France on 2nd, the UK on 6th and Tanzania on the 100+ although 40% of the country is made of wildlife parks and protected areas, something is definitely wrong!!!

[UNOE]

~

Economists perpetually paint a rosy picture of the economy because of continued growth. Meanwhile, wages have been stagnating for decades, the middle class is disappearing, and rising healthcare costs are completely unsustainable over the long term for average Americans. The vast majority of economic growth in the US over the past two decades has been completely swallowed up by Wall Street.

All the focus on GDP obfuscates this reality. All I'm saying is, maybe we shouldn't be focusing on GDP so much. There is too much value placed on growth. We need to start emphasizing other metrics that place value on things that matter to everyday working people.

Well, GDP was never a measure of how good living in a country is...
For example, New Zeeland stands on rank 51 with 200 trillion while Bangladesh is on 289 with 319 trillion....
The GDP of a country can grow simply by an increased population, that's why we have GDP per capita, and then we have GDP PP

The indicator does what is supposed to do, that people use it in a way it is not supposed to be used doesn't mean it's wrong or fake one

The question is, what would be a better indicator?
How would we manage to quantify in numbers wages and expenses and health and happiness?
I've never seen anything like that.

As for that environment stuff, here's an index:
https://epi.envirocenter.yale.edu/epi-topline?country=&order=field_epi_rank_new&sort=asc

But if you think about the environment and you have France on 2nd, the UK on 6th and Tanzania on the 100+ although 40% of the country is made of wildlife parks and protected areas, something is definitely wrong!!!

That's just stupid.
A countries evniromental policy has nothing to do with the power of its economy.
China comes in 120th, how weird that all those climate change advocates are pressuring only the countries on the top of the table to change 

[exstasie]

Economists perpetually paint a rosy picture of the economy because of continued growth. Meanwhile, wages have been stagnating for decades, the middle class is disappearing, and rising healthcare costs are completely unsustainable over the long term for average Americans. The vast majority of economic growth in the US over the past two decades has been completely swallowed up by Wall Street.

All the focus on GDP obfuscates this reality. All I'm saying is, maybe we shouldn't be focusing on GDP so much. There is too much value placed on growth. We need to start emphasizing other metrics that place value on things that matter to everyday working people.

Well, GDP was never a measure of how good living in a country is...
For example, New Zeeland stands on rank 51 with 200 trillion while Bangladesh is on 289 with 319 trillion....
The GDP of a country can grow simply by an increased population, that's why we have GDP per capita, and then we have GDP PP

The indicator does what is supposed to do, that people use it in a way it is not supposed to be used doesn't mean it's wrong or fake one

I didn't suggest it was "wrong" or "fake." I'm just agreeing with what Stiglitz et al. are saying:

The problem, he says, is that politicians see positive GDP figures and continue with the status quo.

This is a obviously a serious problem with regard to public policy. GDP shouldn't be treated as the end-all when determining the health and prosperity of a society, but it often is.

The question is, what would be a better indicator?

It's not about better or worse, just that growth shouldn't be the only metric that matters. Governments should be more concerned about economic inequality, wage stagnation, growing healthcare costs as a portion of wages, etc.

[audaciousbeing]

All of the economic metrics in most cases are only figures and graphs that look at the average without actually considering the impact of the people that are facing the hit as much as possible. Economic indices have been turned to tools of bragging by the political class as a justification for them to get another term in office while those who are not constraint by terms are using that as an excuse to further justify their hold on to power which is very disheartening in the 21st century unfortunately there is nothing that can be done. The same economists have propounded these theories are now going against it. Its surely going to be a long ride to change the narrative.

[jameshugo17]

Countries are forming new year strategies. Christmas time means only one year cycle. I think trade wars will become more apparent. States can pursue tighter monetary policies. The poor become more poor. The rich make more money. A painful painting.

[squatz1]

Economists perpetually paint a rosy picture of the economy because of continued growth. Meanwhile, wages have been stagnating for decades, the middle class is disappearing, and rising healthcare costs are completely unsustainable over the long term for average Americans. The vast majority of economic growth in the US over the past two decades has been completely swallowed up by Wall Street.

All the focus on GDP obfuscates this reality. All I'm saying is, maybe we shouldn't be focusing on GDP so much. There is too much value placed on growth. We need to start emphasizing other metrics that place value on things that matter to everyday working people.

Well, GDP was never a measure of how good living in a country is...
For example, New Zeeland stands on rank 51 with 200 trillion while Bangladesh is on 289 with 319 trillion....
The GDP of a country can grow simply by an increased population, that's why we have GDP per capita, and then we have GDP PP

The indicator does what is supposed to do, that people use it in a way it is not supposed to be used doesn't mean it's wrong or fake one

I didn't suggest it was "wrong" or "fake." I'm just agreeing with what Stiglitz et al. are saying:

The problem, he says, is that politicians see positive GDP figures and continue with the status quo.

This is a obviously a serious problem with regard to public policy. GDP shouldn't be treated as the end-all when determining the health and prosperity of a society, but it often is.

The question is, what would be a better indicator?

It's not about better or worse, just that growth shouldn't be the only metric that matters. Governments should be more concerned about economic inequality, wage stagnation, growing healthcare costs as a portion of wages, etc.

I mean at the end of the day, a higher GDP (and GDP per Capita) does have the best success in measuring if your country is developed and if the people are receiving wages large enough to support a middle class / upper middle class lifestyle. It's the best metric we have for this sort of thing.

I've even seen some info in showing that certain nations in the middle east have comparable GDP per capita to a nation like Greece -- but this doesn't mean that the people have more. It just means that everyone in the elite have a ton of money and the poorest have nothing. But in GDP per capita/GDP you're unable to see that. The only thing you know is if the economy is bigger or not.

If people want to find out the rest of the data, the resources are there for them to find it. But the gov isn't going to advertise bad metrics like that.

[Linkkoin]

BigMac index is often more reliable than pure GDP data.