Continuing Conversation... Diane Coyle on GDP
By Amy Willis
Questions below the fold:
Check Your Knowledge:
1. Describe the origins of GDP. What was the role of the state in this, and how does this affect your perspective on the veracity of this measure? How has its use changed over time?
2. List some of the challenges faced in calculating GDP. Which of these challenges do you think is the most significant, and why?
3. What is the “Easterlin paradox,” and what does this suggest about the relationship between happiness and economic growth?
4. In discussing the differences in GDP between rich and poor countries, Coyle suggests that there are incentives for poorer countries to “remain poor.” What does she mean by this? How might such incentives be mitigated?
5. To what extent does relying on GDP as a measure of economic growth perpetuate “gross materialism?”
6. Coyle remains optimistic about micro level measures of economic growth, but there is a great deal more measuring she thinks can and should be done. What does she think the government should be measuring, and how much more illuminating do you think such measurements might be? What would you add (or subtract)?
7. Listen to this episode of EconTalk with Stevenson and Wolfers on happiness. What is their view of the Easterlin paradox? Do you agree with their approach?
7. In a 2010 Econlib Feature Article, David Henderson rails against what he calls “GDP festishism,” or the use of GDP as a measure of well-being. He uses several examples to illustrate why GDP is a poor target for government policy. Coyle tells Roberts that governments should stop claiming that they can increase GDP. Yet she seems more sanguine about the possibilities for policy-makers than Henderson. How do you think Henderson and Coyle disagree, and what do you think Coyle would say about the examples Henderson uses in his piece?
8. Some have suggested that GDP growth only benefits a small portion of the population. In this view, GDP is flawed because it masks diverse impacts of growth on different parts of the population. Find an EconTalk guest who agrees with this perspective and one that does not. What is their disagreement about?