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Reimagining GDP à la Stiglitz et Sarkozy

January 10, 2010

In honour of my last night in Paris, I’m posting a link to the report from a blue ribbon panel led by Joseph Stiglitz at the behest of Nicolas Sarkozy. It is a push for changing our economic statistics and indicators to reflect environmental “externalities”. Think back to those introduction to macroeconomics lectures when the professor asked the class what was missing from how GDP is measured…

If adopted (and this is a pretty big if), it would substantially change how we value things– and give more weight to the resources that we are currently plundering and destroying. Worth fighting for. At the very least, worth thinking about. Maybe one day, France will not only be famous for its fabulous pains-au-chocolats, its wines, and the Eiffel Tower, but also for helping to revolutionize economics. Here’s to hoping.

Increasing concerns have been raised since a long time about the adequacy of current measures of economic performance, in particular those based on GDP figures. Moreover, there are broader concerns about the relevance of these figures as measures of societal well-being, as well as measures of economic, environmental, and social sustainability.

Reflecting these concerns, President Sarkozy has decided to create this Commission, to look at the entire range of issues. Its aim is to identify the limits of GDP as an indicator of economic performance and social progress, to consider additional information required for the production of a more relevant picture, to discuss how to present this information in the most appropriate way, and to check the feasibility of measurement tools proposed by the Commission. Commission’s work is not focused on France, nor on developed countries. The output of the Commission will be made public, providing a template for every interested country or group of countries. Full report.

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