Presentation on theme: "Is GDP or GDP pc an appropriate macro measure?. The main economic indicator GDP is the main economic indicator used by economists, analysts, politicians,"— Presentation transcript:
The main economic indicator GDP is the main economic indicator used by economists, analysts, politicians, etc.
GDP increases when… I buy a new bicycle I buy a beer BUT, it also increases when.. there is an oil spill off the coast of Mexico or the U.S. a rise in crime leads to more jails wars break out increasing the production of weapons
“Our main indicator of economic progress doesn’t distinguish between beneficial economic activity and dysfunctional economic activity” Dan O’Neill, Environmental & Ecological Economics, University of Leeds, U.K.
Slowly, we are changing the way we measure progress The Genuine Progress Indicator – Separates good stuff from bad stuff – Makes comparisons over time
Completely different national counts Measuring quality of life – Economics of happiness – Well-being – Life satisfaction
Economics of happiness The study of well-being and happiness Theory and quantitative research Factors affecting happiness
Income effect Some results: – Happiness plateaus at $40,000 – Absolute versus relative income
Social relations effect Happiness increases with social relations/social capital Social relations and income paradox
The Human Development Index Income – Gross National Income per capita Education – Average years of schooling (25 year olds) – Expected years of schooling (at age 5) Life expectancy (at birth)