Moving Beyond GDP: A Stock-Flow Approach To Measuring Wellbeing For The G20
An inclusive economic recovery from the pandemic and effective climate action will require concerted global policy efforts. To achieve this, the G20 countries need to move urgently beyond GDP and use a comprehensive approach to assessing national progress.
GDP continues to be the indicator most prioritized by decision-makers, although it is increasingly understood that wellbeing in the long run is determined not by the nation’s GDP (or market income) but by the portfolio of assets that make up its inclusive wealth.
GDP expansion is often associated with the deterioration of wealth, especially natural and social capital, and that these losses are not taken into account in assessing national progress through GDP
The creation and existence of wellbeing frameworks should not be limited to simple statistical exercises. It should aim at influencing policy making and eventually people’s quality of life in a tangible manner.
The proposed framework takes into consideration both stocks and flows and encompasses indicators of economic, as well as environmental, social, and human factors that are the basis for wellbeing in the long-term. Recommendations include convening a G20 study group, engaging statistical agencies, and shaping policies along these new measures. G20 countries are ideally positioned to lead on all of this.
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