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GDP is flawed, but it matters

Suggestions to replace GDP shouldn't be a proxy for advancing actual policies

A factory in Hatfield. Photo: Daniel Leal-Olivas/PA Archive/PA Images

At the moment, many economists and non-economists alike have little confidence in Gross Domestic Product (GDP). It is regularly criticised for being a flawed and incomplete measure of economic welfare. Politicians mindlessly seek to maximise it, it is said, promoting economic growth to the detriment of other policy goals.

Many of these criticisms have resonance. They point to a deep sense of malaise with our economic management, to a feeling that we are undermining those aspects of human welfare which can’t be…

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