Another argument in favour of replacing GDP or developing a complementary indicator could be that traditional macroeconomic aggregates are designed to measure only the monetary value of final goods produced and are not adequate to capture the role and value of data or non-monetary transactions. Thus, they do not effectively reflect the value created by the digital economy.
Thanks for the comment, that’s a very fair point! There are certainly some issues on how such services are represented in these metrics. I think if we can find a better way to measure the state of the economy that accurately includes this, I would be in favour. This article for example has a proposal to do that.
I don’t think it changes the main argument for focusing on the sustainable economic growth (in that case measured by a more accurate metric) instead of focusing on metrics like happiness or life expectancy (or other metrics not directly measuring economic growth) though. What do you think?
Thanks for the article link. The proposed GDP-B indicator does seem like a step in the right direction. The European Commission is also working on developing a new indicator that does a better job at modelling the digital economy (feasibility study).
Yes, I’m not convinced that well-being metrics alone would do a good job either and your argument for emphasising sustainable economic growth seems quite convincing to me.