U.S. government releases a second revision of GDP
The U.S. government released a second revision to its key measure of economic growth for the spring quarter early Friday. GDP grew at an annual rate of 4.6 percent. Nearly every category, barring consumer spending, was up. Americans, at least last spring, were still leery of splashing out on big purchases, other than health care. Gross national product and later gross domestic product are the accepted indicators of economic health, but a growing body of scholarly research suggests we can do better.
The skepticism around GDP and GNP as measures of well-being goes back decades, and is present in an iconic speech delivered by Senator Robert Kennedy at the University of Kansas in 1968.
“The Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play,” Kennedy said. “It does not include the beauty of our poetry or the strength of our marriages.”
And while GDP is easily measurable — an important characteristic for an economic indicator — growth can be deceptive.
“If we have higher divorce rates in a country, then you have lots more money being spent on legal services,” said Julia Kirby, an editor of the Harvard Business Review. “That looks good in GDP, but at a societal level, you wouldn’t say that’s good.”
Kirby says better measures of well-being include whether a country’s population is healthy, educated, happy and getting enough sleep at night.
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