Beyond GDP: We need a dashboard for the whole economy (journal article)
by Mike Holderness
from New Scientist No 2731, 21 October 2009
"HOW much political power can one number exert? Gross domestic product (GDP) is a strong candidate for the world's most potent numerical indicator. Politicians use it to rank states in order of production, and to guide policies to maintain their place in the pecking order. Its year-on-year changes dictate whether an economy is "in recession", which in turn influences what you pay for the loan to buy your home or run your business - and, indeed, the price of fish.
But look under the hood at the factors that feed into the calculation of GDP and you'll see some strange goings-on. For one thing, it's full of virtual production and trading. People who own their houses, for example, are deemed to pay themselves rent, which is included in GDP; it has to be this way, to keep the books tidy."