Joseph Stiglizt: Joshua Roberts / Reuters
American economist Joseph Stiglitz, received the 2001 Nobel prize, urged the world to abandon the use of GDP (gross domestic product) as the main indicator of the state of the economy. He wrote about this in an article for the Guardian newspaper.
According to Stiglitz, is currently the main problems facing the world are global warming, the crisis of inequality and democracy, and GDP does not take into account any of these variables. Because of this, when politicians see the growth of the gross domestic product, they conclude that the economy is all right, whereas this is not so.
The economist cited the example of the crisis of 2008. According to him, in the first three years of recovery after the crisis, more than 90 percent of the profits concentrated in the hands of only one percent of the population of the planet. This statistic, followed by the politicians talked about the economic recovery, although ordinary people this caused obvious doubt.
Stiglitz insists that it is necessary to develop a new method for the assessment of the economy. “If we think that the economy is growing, but this growth is unstable due to environmental destruction and use of dwindling natural resources, the statistics should warn us about this. However, since GDP does not include factors such as resource depletion and environmental degradation, the picture the result is overly rosy,” said he. Stiglitz stressed that if the economy is to measure the wrong things, people will make wrong decisions.
Joseph Stiglitz received the Nobel prize in Economics jointly with economists George Akerlof and Michael Spence for analysis of markets with asymmetric information.
Video, photo All from Russia.