Joseph Stiglitz and Problems with GDP

By | April 22, 2015

I agree with Joseph Stiglitz that GDP doesn’t truly show how well off society and the economy of a country are because it doesn’t give someone any perspective on the average citizens well being. In the video he mentions that GDP for a country could be rising but poverty and income levels could be falling by even more, which doesn’t make GDP a fair representation on how the people of a country are living. He also discusses how sustainability is absent in GDP’s, and a countries GDP being well off doesn’t mean it is sustainable with the example of Argentina. GNP which looks more at income levels of citizens is what was used prior to the switch to GDP, and Stiglitz implies this was a more reasonable way of looking at a societies economic health.  So why is it we use GDP for these measurements? Is it because it can be manipulated by government officials hoping to show positive movement in the countries “economics”?

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