Where GDP is from, and what does that tell us?
In this video, economist Diane Coyle takes us through the origins of GDP as a measure of economic growth and what this should mean for our assessment of it today.
She points out that the context in which GDP emerged, and the challenges the global economy faced at the time were very different than the ones we face today. At the time, GDP was developed as a tool to help understand the economy during the Great Depression, and then to make sure the economy could cope with the war effort during the Second World War. As she points out, if reflects the challenges of the times, and what we wanted the state to do at the time. Now, our economy faces a very different set of challenges.
What do you think?
Diane Coyle says that what the government measures reflects what we want it to do. If our measurements were made for the 20th century, how can they be updated for the 21st century?
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