Problems of using the GDP indicator as an indicator of the socio-economic development of society

Проблемы использования показателя ВВП как индикатора социально-экономического развития общества

Molokanov, Viktor (Молоканов, Виктор) ()
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Molokanov, Viktor (Молоканов, Виктор): Russian Presidential Academy of National Economy and Public Administration, Volgograd Institute of Management

Voprosy upravleniya / Management Issues, 2019, 178-188

Abstract: The article deals with the problem of the adequacy of using the GDP indicator in assessing the socio-economic development of states. Critical comments on the stated problem are grouped in four areas, covering the entire spectrum of socio-political thought. Proponents of a market self-regulating economy focus on the disproportion in the representation of the production and consumption phases in the GDP index. Conservatives emphasize the ambiguous connection between the dynamics of GDP and the dynamics of life satisfaction indicators that arise when social institutions are transformed. Left-liberal researchers focus, above all, on the inability of standard macroeconomic indicators taking into account the destructive effect of economic development on the environment. The position of supporters of the "new paternalism" that has been developed in the framework of behavioral economics was especially highlighted. The GDP indicator, in principle, cannot characterize the socio-economic development of society, as it summarizes the results of non-optimal, irrational decisions of economic agents. The article substantiates the need to use alternative indicators to assess the development of the Russian economy. Assessment by the happiness index will allow solving such acute problems of the Russian economy as regional unevenness of economic development, high level of social stratification, low rates of investment in the Russian economy, environmental pollution caused byeconomic development. In addition, in assessing socio-economic development by the happiness index the following vulnerabilities were revealed: the ability to manipulate the assessment methodology; the possibility of unconstructive use of the happiness index to justify the conservation of social institutions.

Keywords: gross domestic product (GDP); gross output index; genuine progress indicator; happiness index; Easterlin paradox; behavioral economy (search for similar items in EconPapers)
Date: 2019
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