{"id":791,"date":"2008-10-16T07:24:01","date_gmt":"2008-10-16T12:24:01","guid":{"rendered":"http:\/\/ietransfer.wpengine.com\/?p=791"},"modified":"2016-09-16T09:50:48","modified_gmt":"2016-09-16T16:50:48","slug":"gdp-vs-gpi-which-measures-the-economy-best","status":"publish","type":"post","link":"https:\/\/inspiredeconomist.com\/articles\/gdp-vs-gpi-which-measures-the-economy-best\/","title":{"rendered":"GDP vs GPI : Which Measures The Economy Best?"},"content":{"rendered":"
<\/p>\n
<\/a><\/p>\n Stop me if you\u2019ve heard this one before:<\/p>\n A businessman is showing a potential investor around his factory. The investor is very impressed and likes the businessman\u2019s figures. These show that the factory produces $5.2m worth of goods.<\/p>\n \u201cAnd what about your expenditure?\u201d he asks the businessman. The businessman looks back at him blankly. \u201cYou know: raw materials; transport costs; staff wages; loan repayments…..\u201d<\/p>\n The business man starts to dribble from the corner of his mouth. In the end the investor storms off muttering darkly about how the gene pool needs to be reduced.<\/p>\n This is precisely how GDP \u2013 Gross Domestic Product \u2013 works. It measures what is produced, but ignores what is required to create that production. So long as the factory keeps churning stuff out to be flogged to consumers, nothing else matters.<\/p>\n In 1995 Redefining Progress<\/a> introduced a new way of measuring economic strength: the Genuine Progress Indicator (GPI).<\/p>\n This looks at economic activity from the point of view of the impact it has on the individual and society, not the impact it has on a bank balance.<\/p>\n The biggest difference between it and GDP is what they class as costs and what they class as benefits. For instance:<\/p>\n So under GDP high crime rates, spending all hours at your desk and environmental damage are all good for the economy.<\/p>\n Conversely, under GPI low crime rates, pursuing amateur interests and education and careful stewardship of the environment are all good for the economy.<\/p>\n A few months ago, Clark Williams-Derry<\/a>, the research director for the Sightline Institute<\/a> in Seattle, called for journalists to stop using GDP<\/a> as a primary measure for economic performance.<\/p>\n But what do you think? Does it make better sense to take into account the softer things in life when measuring an economy\u2019s strength, or is the amount of money which changes hand all that matters?<\/p>\n Leave a comment below: share your opinion and join the discussion, we will be sharing the discussions we’ve had\u00a0 with the expert investors at https:\/\/www.goldeneaglecoin.com\/buy-silver\/silver-bars<\/span><\/a>. Come read up on it!<\/p>\n <\/p>\n Picture Credit<\/strong>: “Gpigraph” by Miss Rogue from flickr under Creative Commons Share Alike 2.0<\/p>\n","protected":false},"excerpt":{"rendered":" With a New Economy starting to emerge, how should we measure its strength? GDP vs GPI : Which Measures The Economy Best?<\/p>\n","protected":false},"author":11,"featured_media":7960,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[47],"tags":[391,803,1325,1781,1783,1799,1888,2048,2761,3758],"adace-sponsor":[],"spectra_custom_meta":{"_edit_last":["32"],"social_buttons":["reddit"],"tweet_this_url":["http:\/\/digg.com\/d1bvMv"],"dsq_thread_id":["143460310"],"_yoast_wpseo_linkdex":["93"],"_yoast_wpseo_focuskw":["GPI"],"_yoast_wpseo_title":["GPI: A Preferable Metric To GDP?"],"_yoast_wpseo_metadesc":["With a New Economy starting to emerge, how should we measure its strength? 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GDP vs GPI : Which Measures The Economy Best?","_links":{"self":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/posts\/791"}],"collection":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/comments?post=791"}],"version-history":[{"count":0,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/posts\/791\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/media\/7960"}],"wp:attachment":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/media?parent=791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/categories?post=791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/tags?post=791"},{"taxonomy":"adace-sponsor","embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/adace-sponsor?post=791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}GPI — An Alternative to GDP<\/h3>\n
\n
Which Do You Favour — GDP or GPI?<\/h3>\n
ALSO SEE: Bhutan’s Gross National Happiness: a Model for Other Countries?
\n<\/a><\/h3>\n