Topic: A Nobel-winning economist says it’s time to kill the GDP metrics (Read 391 times)
BigMac index is often more reliable than pure GDP data.
January 02, 2020, 11:24:00 AM
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...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.
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 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.
December 30, 2019, 05:11:11 PM
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.
December 30, 2019, 04:37:19 AM
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.
December 29, 2019, 04:28:31 PM
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...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.
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 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.
December 29, 2019, 11:37:12 AM
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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.
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
December 29, 2019, 10:28:17 AM
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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.
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!!!
December 29, 2019, 03:55:22 AM
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.
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.
December 28, 2019, 10:51:25 PM
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.
December 28, 2019, 03:37:21 PM
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.
December 28, 2019, 11:21:20 AM
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.
December 27, 2019, 12:08:46 PM
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.
December 26, 2019, 08:58:16 PM
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
December 26, 2019, 06:22:40 PM
It appears people of the world are too feeble minded and uneducated to understand GDP. And so the powers that be are calling for GDP numbers to become obsolescent, so that we feeble minded do not injure ourselves attempting to make sense of GDP.
[...]
This is strikingly similar to americans being denied access to ICOs, access to leveraged crypto based trading platforms like bitmex, crypto ETFs and other innovations. Everywhere throughout the world, opportunities and options are being denied to some demographics. Doors are being closed. What's the reason for this, do you support it? How do people interpret the motive behind these policies?
I mean in all fairness, GDP was never meant to be the sole determinant of everything a country to base things on. Look at the definition of GDP for example, "Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate. GDP can be calculated in three ways, using expenditures, production, or incomes.1"[...]
This is strikingly similar to americans being denied access to ICOs, access to leveraged crypto based trading platforms like bitmex, crypto ETFs and other innovations. Everywhere throughout the world, opportunities and options are being denied to some demographics. Doors are being closed. What's the reason for this, do you support it? How do people interpret the motive behind these policies?
It just determines the growth of a country based on the production and income. Think about it, US is THE best performing economic nation cause they have put themselves in situation like that by keep printing notes, the rich people over there keep getting richer, and the poor get more poorer. One wrong neutralizes the other. Anyone who dare go against the US will most probably face an existential crisis, and will face a war they can't afford to win. The time is not to kill the GDP metrics, but rather change the whole Global economy, and stop letting one country decide the fate for the rest of the whole World. I don't care if Crypto is not accepted in the most parts, but if countries can work together and stop the multiple global crisis we're on the verge of facing, I would rather have that.
1 Source: https://www.investopedia.com/terms/g/gdp.asp
December 26, 2019, 04:59:46 PM
So much of our GDP now is purely growth in the financial markets. Hedge funds and investment banks are sucking up all the growth while wages have been completely stagnant for many years, thus the deterioration of the middle class.
It is really a vague calculation and the real reason we are using the analysis is to understand the market growth and the economic situation of the country, basically just calculating the number of transaction done in a country be it anything and definitely it has its flaws but you need to have a metric to determine how a country is doing and is there a suggestion for a better metric, if you are concerned about the deterioration of the middle class the ruling politicians has to make rudimentary changes in how they evaluate things and how to balance the economic structure so that there wont be a huge disparity between the rich and the poor. December 26, 2019, 02:24:05 PM
That's not my reading of what he said. It's more about the fact that GDP doesn't reflect "the big picture": living standards, inequality, environmental issues. Only looking at GDP makes everything about achieving growth at any cost.
How would this be closing doors, ending opportunities?
Normally. GDP shrinks as doors are closed and opportunities are diminished.How would this be closing doors, ending opportunities?
Using different metrics to measure economic health (presumably in addition to GDP) doesn't affect GDP itself.
Getting rid of the GDP metric is simlar to getting rid of deficit numbers or redefining unemployment metrics to illustrate a rosier picture of the economy.
Putting more value on metrics like economic inequality, the deteriorating middle class, environmental degradation, etc. would make places like the US look much worse.
So much of our GDP now is purely growth in the financial markets. Hedge funds and investment banks are sucking up all the growth while wages have been completely stagnant for many years, thus the deterioration of the middle class.
I think focusing purely on GDP is extremely damaging for this reason. Regular working people don't benefit from economic policies that value GDP growth at the cost of other important metrics.
December 26, 2019, 12:45:37 PM
These problems are basically self-solving problems. People think that we should stop it before it is too late but it will stop even if it is too late, just not with humanity. For example, the world is going into a climate change right now right? Do you really think world will stop because all humans die?
Climate change is only the latest crisis being leveraged to push political agendas.
-Drug crisis: citizens must sacrifice rights, $$ and freedom to fix this.
-Terrorist crisis: citizens must sacrifice rights, $$ and freedom to fix this.
-Climate crisis: citizens must sacrifice rights, $$ and freedom to fix this.
And who creates this crisis? As all of these are manufactured agendas.
When humanity is getting closer and closer to end, money will not be a problem, money will not be a solution, humanity will be like a cornered dog and we won't care about rules as much as we care about survival and even if we fail, world will continue to spin even after every single human is dead. So long story short rich do not care about legacy as much as they care about dying rich, they don't realize their grandchildren will be the ones who will not be rich after they died, it will be survival of the fittest for sure.
December 26, 2019, 08:55:55 AM
I hate to support what economists say but I agree with him in this case, as long as a Hitler does not arise tommorow and start property seizure in order to eliminate these problems.
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.
The way we live on this planet is just too dangerous and unsustainable. Reminds me of how cancer grows at the expense of the body it grows on
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.
The way we live on this planet is just too dangerous and unsustainable. Reminds me of how cancer grows at the expense of the body it grows on
it may be true, but what about human greed?
I think so too, but we can see that a house inhabited by 2-5 people sometimes has more vehicles than their number, or it can be called savings. fast.
of course, this will affect the economy, as more job seekers will be looking for it.
sometimes I think Thanos's idea of destroying half the population on earth is appropriate for reflection
December 26, 2019, 06:21:58 AM
You realize this proposal does nothing to address flaws in GDP.
Its more a form of censorship. Similar to how internet search results and news media scrub statistics for how many trillions the EU is currently in debt. Its easy to find the US deficit in trillions. Try to find the same stat for the EU and there is a mysterious censorship blackout in effect.
There isn't a mysterious censorship blackout at all. In the EU, the deficit is calculated per member state:
https://ec.europa.eu/eurostat/statistics-explained/index.php/Government_finance_statistics
Quote
The EU-28’s government deficit-to-GDP ratio decreased from -1.0 % in 2017 to -0.7 % in 2018, while this ratio also decreased in the EA-19 from -0.9 % to -0.5 %. Both in the EU-28 and EA-19, the general government deficit was the lowest in the available time series. Fourteen EU Member States — Luxembourg (+2.7 %), Malta and Germany (both +1.9 %), Bulgaria (+1.8 %), the Netherlands (+1.5 %), Czechia (+1.1 %), Greece (+1.0 %), Sweden, Denmark and Slovenia (all +0.8 %), Lithuania (+0.6 %), Croatia (+0.3 %), Austria (+0.2 %) and Ireland (+0.1 %) — registered government surpluses in 2018.
There were 12 EU Member States, namely Poland, Portugal, Estonia, Latvia, Belgium, Finland, Slovakia, Italy, Hungary, the United Kingdom, France and Spain, that recorded deficits in 2018 that were smaller than 3.0 % of GDP.
Two Member States had deficit equal to or higher than 3.0 % of GDP: Romania (-3.0 %) and Cyprus (-4.4 %) (see Figure 1). The high deficit for Cyprus in 2018 is mainly due to the impact from the restructuring of the Cyprus Cooperative Bank Ltd (CCB) - the sale of the good parts of CCB and the subsequent integration of the remaining public financial defeasance structure into general government accounts.
There were 12 EU Member States, namely Poland, Portugal, Estonia, Latvia, Belgium, Finland, Slovakia, Italy, Hungary, the United Kingdom, France and Spain, that recorded deficits in 2018 that were smaller than 3.0 % of GDP.
Two Member States had deficit equal to or higher than 3.0 % of GDP: Romania (-3.0 %) and Cyprus (-4.4 %) (see Figure 1). The high deficit for Cyprus in 2018 is mainly due to the impact from the restructuring of the Cyprus Cooperative Bank Ltd (CCB) - the sale of the good parts of CCB and the subsequent integration of the remaining public financial defeasance structure into general government accounts.
If you download the document it should show you the actual numbers in billions and trillions.
The EU28 are all the countries in the EU (including the UK in this particular calculation). The EU19 are the 19 countries of the eurozone.
Does this mean you don't actually know what the EU deficit in trillions is. As you've never bothered to add the accumulate deficits of each and every EU member state?
All I know is, the EU used to have equivalent websites to this one which tallies US debt:
https://usdebtclock.org/
EU sites like that one were shut down. Then they took steps to make it more difficult for someone to figure out what actual EU debt is.
I used to be able to type: "european union total deficit" into a search engine and it would give me a valid response. That no longer works as search engines would appear to scrub the results.
Its similar to how many news stories which were previously visible to the public are now concealed behind a paywall. Its a softer form of censorship than burning books but it is still censorship.
December 26, 2019, 06:00:20 AM
You realize this proposal does nothing to address flaws in GDP.
Its more a form of censorship. Similar to how internet search results and news media scrub statistics for how many trillions the EU is currently in debt. Its easy to find the US deficit in trillions. Try to find the same stat for the EU and there is a mysterious censorship blackout in effect.
There isn't a mysterious censorship blackout at all. In the EU, the deficit is calculated per member state:
https://ec.europa.eu/eurostat/statistics-explained/index.php/Government_finance_statistics
Quote
The EU-28’s government deficit-to-GDP ratio decreased from -1.0 % in 2017 to -0.7 % in 2018, while this ratio also decreased in the EA-19 from -0.9 % to -0.5 %. Both in the EU-28 and EA-19, the general government deficit was the lowest in the available time series. Fourteen EU Member States — Luxembourg (+2.7 %), Malta and Germany (both +1.9 %), Bulgaria (+1.8 %), the Netherlands (+1.5 %), Czechia (+1.1 %), Greece (+1.0 %), Sweden, Denmark and Slovenia (all +0.8 %), Lithuania (+0.6 %), Croatia (+0.3 %), Austria (+0.2 %) and Ireland (+0.1 %) — registered government surpluses in 2018.
There were 12 EU Member States, namely Poland, Portugal, Estonia, Latvia, Belgium, Finland, Slovakia, Italy, Hungary, the United Kingdom, France and Spain, that recorded deficits in 2018 that were smaller than 3.0 % of GDP.
Two Member States had deficit equal to or higher than 3.0 % of GDP: Romania (-3.0 %) and Cyprus (-4.4 %) (see Figure 1). The high deficit for Cyprus in 2018 is mainly due to the impact from the restructuring of the Cyprus Cooperative Bank Ltd (CCB) - the sale of the good parts of CCB and the subsequent integration of the remaining public financial defeasance structure into general government accounts.
There were 12 EU Member States, namely Poland, Portugal, Estonia, Latvia, Belgium, Finland, Slovakia, Italy, Hungary, the United Kingdom, France and Spain, that recorded deficits in 2018 that were smaller than 3.0 % of GDP.
Two Member States had deficit equal to or higher than 3.0 % of GDP: Romania (-3.0 %) and Cyprus (-4.4 %) (see Figure 1). The high deficit for Cyprus in 2018 is mainly due to the impact from the restructuring of the Cyprus Cooperative Bank Ltd (CCB) - the sale of the good parts of CCB and the subsequent integration of the remaining public financial defeasance structure into general government accounts.
If you download the document it should show you the actual numbers in billions and trillions.
The EU28 are all the countries in the EU (including the UK in this particular calculation). The EU19 are the 19 countries of the eurozone.
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