The GDP & the Insufficiency of Econometrics

Click here for "GPD: RIP?". This article appears in Cornell Enterprise, the official academic journal of The Johnson School of Management at Cornell University.

The Gross Domestic Product is one of the most closely watched and often-quoted economic statistics. But it's also among the most misleading. The GDP is supposed to measure the total output of goods and services, and yet it fails to count the multi-billion-dollar black market and the enormous economic contribution of child rearing. It registers growth even when that growth is built on an unsustainable foundation of pollution, depleted natural resources, and ruinous borrowing. It can lend the appearance of widespread economic prosperity even as the ranks of the poor expand...