Prize winner Joseph Stiglitz, highlighted the limitations of GDP per capita as an indicator of economic performance and social progress. The report argued that the conventional measurement system of economic activity needs to shift away from measuring economic production and focus instead on measuring human well-being. Moreover, President of France, Nicolas Sarkozy, argued that, "For years statistics have registered an increasingly strong economic growth as a victory over shortage, until it emerged that this growth was destroying more than it was creating. The [2008 global financial] crisis doesn't only make us free to imagine other models, another future, another world. It obliges us to do so" (The Guardian, 2009). 1A number of alternative measures of progress have been devised, including the Measure of Economic Welfare (MEW) (Nordhaus and Tobin, 1973), the Index of Sustainable Economic Welfare (ISEW) 2 (Daly and Cobb 1990), and the Genuine Progress Indicator (Lawn 2003). All of these progress indices are designed to better reflect the economic welfare that is associated with 1 The shortcomings of GDP per capita as a measure of progress have long been known (Küznets, 1941; Abramavitz, 1961). For example, GDP per capita ignores non-market production and fails to account for the social and environmental costs of production. It also fails to capture the distribution of income and excludes the value of leisure and illegal activities. 2 Like the GPI, the MEW was an adjusted GDP to take into account certain aspects of welfare that the GDP faled to properly consider. The ISEW was also an adjusted GDP but was more comprehensive in the adjustments made than the MEW. The ISEW is the basis of the GPI.
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