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Genuine progress indicator (GPI) is a metric that has been suggested to replace, or supplement, gross domestic product (GDP). [1] The GPI is designed to take fuller account of the well-being of a nation, only a part of which pertains to the size of the nation's economy, by incorporating environmental and social factors which are not measured by GDP.
Although for many decades, it was customary to focus on GDP and other measures of national income, there has been growing interest in developing broad measures of economic well-being. National and international approaches include the Beyond GDP programme developed by the European Union , the Better Lives Compendium of Indicators developed by ...
GDP also does not capture certain phenomena impacting citizens' well-being. [56] For example, traffic jams could cause GDP to increase as there is a higher consumption of gasoline, however, GDP fails to consider citizens' well-being in terms of the quality of air due to air pollution from the traffic jams. [57]
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Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". [1] It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on monetary policy in the United Kingdom: [2]
But for all of GDP's fame, it has one major flaw. Flow versus stock GDP measures "flow," which is similar to a company's income statement. What it ignores is a country's "stock" -- the equivalent ...
There is a current U.S. system that does measure unpaid labor already: the Bureau of Economic Analysis, the agency that works alongside the U.S. Census to measure population growth and trends.
GDP is misleading as an indicator or even as a proxy of the welfare of a nation, let alone as a measure of people's well-being, [2] although the makers of economic policy commonly think to the contrary.