Thursday, January 24, 2008

France interested by new ways to mesure economical growth

Very interesting article on the blog of French Newspaper, Lefigaro, about the World Economic Forum.

I wanted to write this article in English even if the article is French, because it is important and seems to be a good idea other countries should think about. Indeed, I have the same vision on how to measure a country's performance.

Of course, nowadays we use the famous GDP, which is basically a global turnover of a nation. But Nobel Price Joseph Stiglitz is not quite agree with this idea. He thinks that there are so many different environment impacting of the global health of a country that you can't simply rely on the unique GDP. You also have to take into account the environment, the leisure and the health system of a country.

For example, Joseph Stiglitz says: "Emerging countries feel they are rich thanks to their growth, but their environment is degrading fast... Americans work more and longer than French and European people. That counts. For economists, leisures do not count."

Health in the US:
Another example is the Healthcare. In the US, health expenses count for 16% of GDP, but they are not efficient, compared to other countries. Hence, the amount does not show the real quality.

The idea is therefore to take into account all these important data to see how good is a country.

The Human Development Index
That's the same idea with the Human Development Index created by the United Nations. Every year, the United Nations deliver a report about Human Development, and an Index per country taking into account things such as economy, health care, education, ecology...

I have always been a fan of this report that shows the real performance of a country. For example, you might earn more money as a citizen, but you have to pay for your retirement, for your education, and leisure, whereas in France a lot of these things are free, paid by the government. Actually, the US are not first in the ranking, most of the time won by Nordic countries like Norway.

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