Question

Many economists argue that our current measure of GDP is inadequate. Are there better measures and what are the implications for business?

Answer 1

Yes, according to many economists GDP is considered as an inadequate measure as a whole because it may provide details of all income and expenditure and provide us with a number and based on that we can determine that it is growing or not based on the previous year value. The economic growth may be determined but that is just a portion and there are other considerations as well and one of them is Societal Welfare which has no role to play in GDP calculation.

Yes according to various economist, they believe that Genuine Progress Indicator (GPI) is considered to be a better measure because it gives details about personal consumption and expenditure which helps to make us understand about the actual picture because it deals with various other components as well which has no place in GDP calculation like unemployment, pollution, social work, cost of crime, etc.