Economists use gross domestic product (GDP) to keep track of how an economy is doing. GDP measures the value of all final goods and services produced in an economy in a given period of time, usually a quarter or a year.
A recession occurs when GDP is decreasing. An expansion occurs when GDP is increasing.
The unemployment rate measures what fraction of the labour force cannot find jobs. The unemployment rate rises during recessions and falls during expansions.
WHAT THE SOCIAL PROGRESS INDEX CAN REVEAL ABOUT YOUR COUNTRY
When Simon Kuznets delivered a report on National Income to the United States in 1934, the economy was plummeting into the Great Depression and policy makers were struggling to respond.
His reliable data on GDP, helped the US out of its slump. GDP is still used today as the benchmark of success in our global economy.
The problem is that GDP is flawed. It ignores the environment. It counts bombs and prisons as progress. It has nothing to say about fairness or justice. Is it any surprise that our world, marching to the drumbeat of GDP, is teetering on the brink of environmental disaster and filled with anger and conflict.
In his TED speech, Michael Green introduces us to the Social Progrex Index, which is a measure of well-being in society. It’s a new way of looking at the world. The index is based on three dimensions:
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Does everyone have the basic needs for survival: food, water, shelter, safety?
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Does everyone have access to the building blocks to improve their lives: education, information, health, sustainable environment?
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Does every individual have access to a chance to pursue their goals and dreams and ambitions free from obstacles? Do they have rights, freedom of choice, freedom from discrimination and access to the world’s most advanced knowledge?