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NC State Economist Dr. Mike Walden – “GDP Isn’t Everything”

 

Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.   Today’s program looks at whether GDP is everything.  Mike, there is much discussion today about economic growth, and ways to increase the economic growth rate.  The measure that gives us a reading on economic growth is GDP, short for gross domestic product.  Yet some criticize our focus on GDP, saying it doesn’t capture everything that is important.  Are they right?

Mike:  Summary Answer

  1. Yes they are
  2. Users of GDP never claim it is the only measure of well being
  3. Captures aggregate production  of goods and services – which, in turn, is tied to aggregate income
  4. So GDP rises if we produce more, work more, and work harder and more efficiently
  5. But certainly, that’s not all there is in life
  6. Vacations, rest, and enjoyment are important
  7. Also important to consider environmental impacts of increasing GDP
  8. So GDP should be just one element of measuring quality of life
  9. I’m MW

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service