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GDP vs EVA as an Economic Indicator

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  • Cachanosky, Nicolas

Abstract

This article discusses the limits and charactristics of GDP as economic indicator and suggests that an Economic Value Added (EVA®) approach would be more accurate and appropriate to measure macroeconomic performance. The main difference is that EVA® takes into consideration the invested capital cost of opportunity, while GDP is focused on quantity of production; an EVA® approach will be focused on the economic result of production activities. A final comment is made on the characteristics and limits of a GDP calculated using the EVA®

Suggested Citation

  • Cachanosky, Nicolas, 2009. "GDP vs EVA as an Economic Indicator," MPRA Paper 15262, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15262
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    File URL: https://mpra.ub.uni-muenchen.de/15262/1/MPRA_paper_15262.pdf
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    References listed on IDEAS

    as
    1. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    2. Morgenstern, Oskar, 1972. "Thirteen Critical Points in Contemporary Economic Theory: An Interpretation," Journal of Economic Literature, American Economic Association, vol. 10(4), pages 1163-1189, December.
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    Cited by:

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    2. Burja Vasile, 2013. "Economic Value Added And Stakeholders Interests," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 512-522, December.

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    More about this item

    Keywords

    GDP; Growth; Economic Value Added; EVA;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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