You know something is fishy when economists say things are going well in Sudan.
Though that nation is torn by war and genocide, its Gross Domestic Product has risen steadily, said Ken Bagstad, a doctoral student at the Univeristy of Vermont who spoke on campus today.
GDP, the most commonly used indicator of economic health, is sick, critics say. It tallies up all the money spent in a given period, but doesn’t consider what those dollars buy, Bagstad said. It ignores unpaid work, the depletion of natural resources and the positive effects of investing in, for instance, disease prevention and wildlife habitat.
One potential alternative to this warped calculus is the Genuine Progress Indicator, an economic measure that accounts for factors ignored by GDP, such as income distribution, degradation of ecosystems and the cost of crime.
Bagstad presented research in which he compared the economy of an Ohio county with one in Vermont. The counties scored about the same when measured by GPI, but the consumption in the Vermont county was lower, illustrating what Bagstad called “the two paths to GPI” - consume more, or reduce environmental and social costs.
“I don’t want to present GPI as the answer,” he said, “but it could be one answer” to the shortcomings of GDP.
The presentation was sponsored by the Sustainable Michigan Endowed Project, which is also funding research similar to Bagstad’s to be conducted in the Lansing area by Robby Richardson (CARRS).
-Andy McGlashen


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