GDP and GPI Concepts Are Complementary: Towards a Welfare-oriented Economic Society
Published: September 2021
This article explores the relationship between GDP and the genuine progress indicator (GPI) and examines the possibility of reconciling the two measures. GDP is not an indicator of well-being: to address the welfare perspective, the measure of economic welfare (MEW) was constructed by revising GNP and further developed to create GPI (and the index of sustainable economic welfare —ISEW). GDP finds great wage-earning differentials; while GPI is substantially affected by unpaid work, not only by the magnitude of this factor but by its quality implications. We suggest moderate reforms and policies for the improvement of GDP, which would also have the effect of improving GPI. Both concepts are complementary and separate for practical purposes: GDP is used to formulate government policy and GPI measures what has been achieved from a viewpoint of welfare.