GDP and Welfare: A spectrum of opportunity

Economic measurement is currently under debate as rarely before. Many authors have challenged the traditional approach to National Accounts, each with their own solution to better measuring the modern economy. Described by one eminent economist as ‘akin to a religious war’, the debate about which activities should be within the production boundary defining the scope of the National Accounts is an active one with strongly argued opposing positions. This paper is interested in two aspects in the debate: i) different users require different measures to address different policy problems and ii) changes in technology, data techniques and new sources of data mean the economic measurement community, and specifically National Statistics Institutes, are on the cusp of being able to affordably move from just measuring what the economy can produce to potentially measuring variables of wider interest, particularly economic welfare. As such, this paper attempts to map and prioritise the options available on a practical spectrum, which can be broadly broken into four segments; variants consistent with the current international guidance on national accounting (Current GDP), variants which could be seen as being in scope of potential future iterations of this guidance (Future GDP), variants which move beyond the likely future scope of national accounting, and which therefore stray into being welfare measures (Welfare), and finally the range of frameworks which capture multi-dimensional measures of wider human well-being beyond the economic (Well-Being).