GDP and Quality of LifeMeasuring What We Care About

The Centerfor the

Advancementof the

Steady State Economy

• History of economic growth and GDP

• Critical view of GDP

• Alternative measures to supplement GDP

• Recent initiatives

• Barriers to change

• Path forward

Outline

What Is Economic Growth?

What Exactly Is GDP?

GDP = C + I + G + (X-M)

History of Growth in GDP

World GDP (1990 millions of dollars)Source: Angus Maddison

History of Growth in GDP

Average World GDP per Capita (1990 dollars)Source: Angus Maddison

Policy on GDP Growth

• History of economic growth and GDP

• Critical view of GDP

• Alternative measures to supplement GDP

• Recent initiatives

• Barriers to change

• Path forward

Outline

Critique of GDP

GDP and Happiness

HappinessIndex

Income per Person ($)

Source: Inglehart andKlingemann(2000)

• History of economic growth and GDP

• Critical view of GDP

• Alternative measures to supplement GDP

• Recent initiatives

• Barriers to change

• Path forward

Outline

What is Quality of Life?

Ingredients:Subsistence, Reproduction,Security, Affection, Leisure,Understanding, Participation,Spirituality, Creativity,Identity, Freedom

Human Needs Soup

Opportunity

Natural CapitalSocial Capital

Human CapitalBuilt Capital

Perception

U.N. Human Development Index

Ecological Footprint

Source: Global Footprint Network

Genuine Progress Indicator

$10,000

$20,000

$30,000

$40,000

1950 1960 1970 1980 1990 2000

GDP per Capita

GPI per Capita

U.S. GPI per Capita Source: Redefining Progress

Calvert-Henderson Indicators

• Education• Employment• Energy• Environment• Health• Human Rights• Income• Infrastructure• National Security• Public Safety• Recreation• Shelter

Happy Planet Index

*

• History of economic growth and GDP

• Critical view of GDP

• Alternative measures to supplement GDP

• Recent initiatives

• Barriers to change

• Path forward

Outline

Integrated Environmental andEconomic Satellite Account

+

= XXX

OECD World Forum

EU Conference: Beyond GDP

Bhutan’s GNH

Stiglitz Commission

• History of economic growth and GDP

• Critical view of GDP

• Alternative measures to supplement GDP

• Recent initiatives

• Barriers to change

• Path forward

Outline

Inertia

Paradigm of Growth

Powerful Interests

• History of economic growth and GDP

• Critical view of GDP

• Alternative measures to supplement GDP

• Recent initiatives

• Barriers to change

• Path forward

Outline

Overcoming Inertia

Changing the Paradigm

Aligning the Efforts

Maybe changingGDP isn’t that

hard.

Let’s Get on with It!

Take a Position!www.steadystate.org

The Centerfor the

Advancementof the

Steady State Economy