The Debate on GDP. Where we are at. Or, how to run to its aid with contempt of danger and hope to get out unharmed.

Guido Ferrari; José Mondéjar Jiménez; Yanyun Zhao; Guillermo Ceballos Santamaria; Guido Ferrari; José Mondéjar Jiménez; Yanyun Zhao; Guillermo Ceballos Santamaria

doi:10.3934/NAR.2025005

National Accounting Review

2025, Volume 7, Issue 1: 106-124. doi: 10.3934/NAR.2025005

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Research article

The Debate on GDP. Where we are at. Or, how to run to its aid with contempt of danger and hope to get out unharmed.

1.
Department of Statistics, Computer Science, Applications "G. Parenti", University of Florence, viale Morgagni, 59-50134 Firenze, Italy
2.
School of Statistic, Renmin University of China, Beijing 100872, China
3.
Faculty of Social Sciences of Cuenca, University of Castilla-La Mancha, Cuenca Campus, Camino Pozuelo, s/n, 16071 Cuenca, Spain

Received: 12 January 2025 Revised: 26 February 2025 Accepted: 26 February 2025 Published: 05 March 2025
JEL Codes: E01, E1, I3

The debate on the gross domestic product (GDP) and whether or not it is appropriate to measure countries' or people's well-being has been going on for approximately 30 years. It was reinvigorated in the wake of the document drawn up by the Sarkozy-Stiglitz Commission and then weakened from 2020 onward until almost disappearing. In our opinion, it is worth returning to the issue, as many aspects have not been well specified and approached. In this paper, we discuss the state of the art, examining and showing how some points are inappropriately posed, misunderstood, or even wrong. The basic misunderstanding is that GDP can be an indicator of well-being. This is not the case, as underlined by the Commission and confirmed by the analysis that we conducted here. It is somewhat commonly agreed among many authors and in the Beyond GDP initiative that GDP should be set aside and replaced by some alternative indices. We show that GDP cannot be replaced or transformed into a sustainable indicator that includes both production and natural resources depletion, environment, and social capital; instead, it would be useful to combine it with some alternative indicators to obtain more complete information. Furthermore, we show that it is not a good idea to oppose sustainable economic growth.
- GDP,
- debate,
- Sarkozy-Stiglitz Commission,
- sustainability,
- well-being,
- Green GDP,
- well-being indicators
Citation: Guido Ferrari, José Mondéjar Jiménez, Yanyun Zhao, Guillermo Ceballos Santamaria. The Debate on GDP. Where we are at. Or, how to run to its aid with contempt of danger and hope to get out unharmed.[J]. National Accounting Review, 2025, 7(1): 106-124. doi: 10.3934/NAR.2025005

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Abstract

The debate on the gross domestic product (GDP) and whether or not it is appropriate to measure countries' or people's well-being has been going on for approximately 30 years. It was reinvigorated in the wake of the document drawn up by the Sarkozy-Stiglitz Commission and then weakened from 2020 onward until almost disappearing. In our opinion, it is worth returning to the issue, as many aspects have not been well specified and approached. In this paper, we discuss the state of the art, examining and showing how some points are inappropriately posed, misunderstood, or even wrong. The basic misunderstanding is that GDP can be an indicator of well-being. This is not the case, as underlined by the Commission and confirmed by the analysis that we conducted here. It is somewhat commonly agreed among many authors and in the Beyond GDP initiative that GDP should be set aside and replaced by some alternative indices. We show that GDP cannot be replaced or transformed into a sustainable indicator that includes both production and natural resources depletion, environment, and social capital; instead, it would be useful to combine it with some alternative indicators to obtain more complete information. Furthermore, we show that it is not a good idea to oppose sustainable economic growth.

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