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Is GDP or GDP pc an appropriate macro measure?. 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..
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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)
Consider the ecological footprint • http://www.gfmag.com/tools/global-database/ne-data/11940-happiest-countries.html#axzz2PuCiFjqb