Mismeasuring Our Lives by Joseph E. Stiglitz

Author:Joseph E. Stiglitz
Language: eng
Format: epub
Publisher: The New Press
Published: 2011-09-12T16:00:00+00:00

Main Messages and Recommendations

Recommendation 1: Look at income and consumption rather than production.

GDP is the most widely-used measure of economic activity. There are international standards for its calculation, and much thought has gone into its statistical and conceptual bases. But GDP mainly measures market production, though it has often been treated as if it were a measure of economic well-being. Conflating the two can lead to misleading indications about how well-off people are and entail the wrong policy decisions. Material living standards are more closely associated with measures of real income and consumption—production can expand while income decreases or vice versa when account is taken of depreciation, income flows into and out of a country, and differences between the prices of output and the prices of consumer products.

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