A New Way of looking at GDP

When looking at a countries well being macro-economists use gross domestic product (GDP), a widely used measurement of economic activity. GDP has been staple of macroeconomic policies geared towards prosperity. Since the period of Keynes there has been a broad consensus that there is a strong positive correlation between high GDP and the well being of a population.

But recently there has been a shift in thought with the uprising of a field known as "Happiness Economics" that has challenged this economic dogma. Countries have begun to challenge the notion that monetary wealth is the sole variable that indicates well being. Bhutan for example now measures its GDP in happiness (called Gross National Happiness) . At first glance this would not seem to really hamper traditional economic thought because Bhutan does not have a large GDP. But now there is reason for archaic macroeconomics to cringe because France, the fifth largest economic has undertaken a study to revamp GDP to include index's that measure happiness. The Commission on the Measurement of Economic Performance and Social Progress, under the initiative of the French government has determined that the traditional measure of GDP is an insufficient measure of well being. The commission was carried out by the help of Joseph Stiglitz a noble laureate and well respected economist at Columbia University. The new measure includes index's such as the human development index (HDI) and positive externalities created by government expenditures.

I myself have not read the entire commission but it is an interesting movement in macroeconomic thought. Just looking at the levels of poverty in the US you can see that GDP does not fully capture well being and there is more to life than how much wealth there is per capita. My only gripe is that this needs to be done by an independent agency and not under the guise of a potentially biased government.