Abolishing GDP

Research output: Working paperProfessional

Abstract

Expectations and information about the growth of GDP per capita have a large influence on decisions made by private and public economic agents. It will be argued here that GDP (per capita) is far from a robust indicator of social welfare, and that its use as such must be regarded as a serious form of market and government failure. This article presents an update on the most important criticisms of GDP as an indicator of social welfare and economic progress. It further examines the nature and extent of the impact of GDP information on the economy, revisits the customary arguments in favour of the GDP indicator, and critically evaluates proposed alternatives to GDP. The main conclusion is that it is rational to dismiss GDP as an indicator to monitor economic progress and to guide public policy. As is clarified, this conclusion does not imply a plea against growth, innovation or national accounting.
Original languageEnglish
Place of PublicationAmsterdam
PublisherTinbergen Instituut
Publication statusPublished - 2007

Publication series

NameDiscussion paper TI
No.07-019/3

Fingerprint

Economic development
Social welfare
GDP per capita
Innovation
Criticism
Market failure
National accounting
Public policy
Public economics
Government failure

Cite this

van den Bergh, J. C. J. M. (2007). Abolishing GDP. (Discussion paper TI; No. 07-019/3). Amsterdam: Tinbergen Instituut.
van den Bergh, Jeroen C.J.M. / Abolishing GDP. Amsterdam : Tinbergen Instituut, 2007. (Discussion paper TI; 07-019/3).
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van den Bergh, JCJM 2007 'Abolishing GDP' Discussion paper TI, no. 07-019/3, Tinbergen Instituut, Amsterdam.

Abolishing GDP. / van den Bergh, Jeroen C.J.M.

Amsterdam : Tinbergen Instituut, 2007. (Discussion paper TI; No. 07-019/3).

Research output: Working paperProfessional

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T1 - Abolishing GDP

AU - van den Bergh, Jeroen C.J.M.

PY - 2007

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N2 - Expectations and information about the growth of GDP per capita have a large influence on decisions made by private and public economic agents. It will be argued here that GDP (per capita) is far from a robust indicator of social welfare, and that its use as such must be regarded as a serious form of market and government failure. This article presents an update on the most important criticisms of GDP as an indicator of social welfare and economic progress. It further examines the nature and extent of the impact of GDP information on the economy, revisits the customary arguments in favour of the GDP indicator, and critically evaluates proposed alternatives to GDP. The main conclusion is that it is rational to dismiss GDP as an indicator to monitor economic progress and to guide public policy. As is clarified, this conclusion does not imply a plea against growth, innovation or national accounting.

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van den Bergh JCJM. Abolishing GDP. Amsterdam: Tinbergen Instituut. 2007. (Discussion paper TI; 07-019/3).