A very interesting guest op-ed in the New York Times today suggested that we should stop using GDP as a measure of economic wellbeing, or at the very least change the name to “gross domestic transactions” to more accurately reflect what it measures.
I thought this was a useful reminder that statistical indexes are not always what they are cracked up to be. How much economics research is geared toward finding determinants of GDP growth? The article linked to here suggests all that research may not tell us that much about how well off we are. There goes a big chunk of World Bank and IMF research. The UNDP’s Human Development Index is better because it incorporates literacy and life expectancy, but even that does not account for the sorts of environmental factors the author here suggests.
I also wonder about using survey results on Happiness as a way of measuring policy. After all, Aristotle made the case that all politics is aimed at producing happiness; if a polity fails at that, it fails, regardless of increases in number and size of transactions.