Has GDP outgrown its use?

More on the intricacies of the GDP and the search for a meaningful way to measure it.


Trust you are well and enjoying the break

2 thoughts on “Has GDP outgrown its use?

  1. Interesting article Professor. While I was gathering GDP data for my report, I actually was thinking about this, can we really rely on this one particular data to compare countries? Is there a better way of measuring each other country? I think it’s unfair for countries that have a high black market to be measured using GDP. I feel that the use of GDP is more beneficial for countries that are already well developed.

  2. Thank you Jo-Ella for a very thoughtful comments and interesting questions.
    how meaningful the GDP is as an indicator of economic activity – by itself and compared with other countries – is exactly the question ‘on the table’. I believe all agree that it is not perfect. we can and should learn more about the potential biases so we better understand the shortcoming, which was what we tried to do very briefly in class.
    the issue is what might replace it and what could be a better indicator. my personal take is that it is still the best measure around. none of the suggested alternative seems appealing to me, but this is a hotly debated issue and I do no more than sharing my views.
    you can read more on this here – from the NYT yesterday:

    I agree with Jo-Ella regarding the bias introduced when the share of the grey economy is large, as it is more common in emerging markets than in developed ones. We have some estimates of the grey economy across countries that remedy this concern, but these are no more than estimates. this is one major issue with the GDP, but unfortunately not the only one.

    I am glad to witness your on-going interest in our course material.

    on another matter altogether – I am enjoying very much reading your assignments! congratulations for very nice work.

    Best regards


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