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The Future of Gross Domestic Product (GDP)

17 August 2018
Будущее валового внутреннего продукта (ВВП)
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The world we are living in today is radically different from the one where GDP as a concept was introduced. Those were days of wars and an economic crisis, with the economic development much more locally oriented than it is now when the globalization and the digital revolution have made the world smaller and less tangible and the countries much more interdependent. We now have virtual, non-material products, such as cloud-based digital music or software obtained by purchasing access to it. The so-called «sharing economy» has emerged, while automation is penetrating most sectors of the economy.

All these phenomena raise the question: is GDP important today? Can we measure progress using statistics based on GDP?

According to Credit Suisse analysts, GDP as an indicator has ceased to reflect global changes in the economy, so we must find an alternative. The report indicates that economic statistics are badly distorted by the developing digital technologies and the constantly emerging new business models and new private business sectors related to these new technologies. Besides, the experts point to some issues in statistical recording associated with the cross-border nature of digital activities.

The report underlines that economic policy should be targeted at reaching a high «happiness index» of the population. This indicator must take into account not only material wealth but also environmental protection, social interaction, and technological development.

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