Tuesday, April 29, 2014

ECONOMY - Is GDP the Best Way to Measure Prosperity?

"Finding GDP alternatives to quantify ‘unpriceable’ prosperity" PBS NewsHour 4/28/2014


GWEN IFILL (NewsHour):  What’s the best way measure a country’s economic growth and the prosperity of its citizens?  Some think the U.S. government is using the wrong yardstick, particularly amid concerns about income inequality and other quality-of-life issues.

Our economics correspondent, Paul Solman, takes a look at alternatives to the quarterly report known as GDP.

But, first, he had to penetrate a batch of confusing initials.  It’s part of his ongoing reporting Making Sense of financial news.

PAUL SOLMAN (NewsHour):  In 1968 then presidential candidate Robert Kennedy blasted our country’s main measure of economic progress, called GNP in those days.

ROBERT KENNEDY:  It counts napalm and it counts nuclear warhead, yet the Gross National Product doesn’t allow for the health of our children, the quality of their education, or the joy of their play.  It measures everything in short, except that which makes life worthwhile.

PAUL SOLMAN:  These days we rely on GDP, Gross Domestic Product, GNP’s near proxy, which measures the total dollar value of goods and services sold in the U.S. in a year, plus exports, minus imports.

The measure still leaves out the things the Kennedy emphasized, but that’s because they’re just too tough to measure.

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