The document criticizes reliance on GDP as a measure of economic success and well-being. It argues that GDP growth does not necessarily improve people's lives and can mask issues like rising inequality, environmental damage, and unsustainable debt. The Nobel laureate Joseph Stiglitz is quoted as saying measures are needed that account for well-being and sustainability, not just economic production.

1. "GDP Fetishism"
"The time is ripe for our measurement system to shift emphasis from measuring economic
production to measuring people’s well-being. And measures of well-being should be put in a
context of sustainability."
-Nobel Laureate Joseph Stiglitz
By: 1) Wealth Distribution and Income
Blake Altemara Inequality
Kendra Senn 2) Sustainability of Growth and
Environmental impact
Jasmine He 3) Factoring in Debt and Leisure time
to GDP
Jason Choe 4) What is being produced in an
economy and why

2. Wealth distribution & income inequality
-Wages have
remained stagnant
to lowered for the
majority of
Americans since
1979.
-GDP only went up
due to the fact that
the wealthiest
Americans
captured most of
the resulting GDP
growth.

3. Wealth Distribution & Income Inequality
-Even though GDP has recovered since the Recession Employment has not been able to catch up.
-Unemployment was at 4.5% in 2007 and peaked at 10%.
-Gains in GDP does NOT mean gains in employment.

4. Sustainability of Growth and Environmental Impact
-Western Developed
Economies in particular have
dramatically increased their
CO2 Emissions Post WWII
and now currently living past
our capacity that the
environment can provide.
-Negative externalities include
the following:
1)Rising Food Prices
2)Increase in Natural
disasters
3)Increase in the cost of
insurance
4)Increase of input costs for
business (i.e. Oil)

5. Sustainability of Growth and Environmental Impact
-Example of
Negative externality
due to air pollution.
-Increase in health
care cost would add
to GDP in this
example yet the
effect would not be
desirable.

6. Factoring in Debt and Leisure time to GDP
Paid work, Unpaid/Housework, and Leisure time
minutes per day and person "The resulting report
amounts to a treatise on
the inadequacy of GDP
growth as an indication of
overall economic health. It
cites the example of
increased driving, which
weighs in as a positive
within the economic
growth, as it requires
greater production of
Gasoline and Cars, yet
fails to account for the
hours of leisure and work
time squandered in traffic
jams, and the
environmental costs of
pollutants unleashed on
the atmosphere"
-P. Goodman

7. Factoring in Debt and Leisure time to GDP
-GDP growth does not show
the debt imbalance that
occurs for households (i.e.
credit card, student loan, and
mortgage debt) that can
often lead to bubbles in the
economy.
-When debt financed
consumption happens for a
sustainable period of time
financial crisis occurs.

8. What is being Produced in an Economy

9. What is being Produced in an Economy
-The United States spends
more on Healthcare than any
other country (both per capita
and as a percentage of income)
-Healthcare spending has
increased GDP
-Not a desirable situation to
spend money at a hospital and
considered "Uneconomic
growth"

10. What is being produced in an economy:
-US spends
nearly double
what other
countries do yet
we have higher
infant & adult
mortality rates.
-Healthcare
systems more
efficient when
spending in
OECD nations in
general
compared to the
US yet GDP does
not account for
this.

11. What is being Produced in an Economy
-Four straight quarters of
positive GDP growth due to
reconstruction measures by
the Japanese government
after the resulting Earth
Quake and Tsunami that hit.
-Japanese citizens would
have been much better off a
year and half ago without all
of this reconstruction had
the earthquake not hit at all.

12. The End
Possible questions for discussion:
1) What is the difference if any to GDP when a consumer takes on
debt compared to a government?
2) Outside of the Norway example how do a country's natural
resources affect GDP?
3) Our article assignment was written in 2009, how might have Joseph
Stiglitz (the author) written it differently if he wrote it this week?
4) What would be a better measurement of social progress or
happiness for a group of people?
5) How would politicians adjust legislation if they used different metrics
outside of GDP growth?