Monday, January 27, 2020

Erald Kolasi and Blair Fix - Why we should abandon GDP

Gross Domestic Product is the most popular and useless quantity in economics

A suggested more accurate way of measuring GDP, which may set a standard for all countries. 

To measure the scale of the economy, we think it is appropriate to focus on energy. Physicist Eric Chaisson argues that energy is the universal currency of science. By measuring economic scale using energy, we put economics in line with the rest of science. And if we are concerned with sustainability, there is no better starting point than to focus on energy use. After all, the profligate use of fossil fuels under a capitalist economy is the primary driver of climate change.

Energy has many forms as it is flows through society. One possibility is to focus on primary energy consumption, and see how this relates to changes in social structure. Another possibility is to measure useful work – the consumption of end-use energy. Still another possibility is to measure the aggregate flow rate, which is a measure of all annual energy conversions in an economic system.
The Mint Magazine 

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