As noted earlier, Diane Coyle's GDP: A Brief but Affectionate History (2nd Edition, Princeton University Press, 2015) answers this query. The Financial Times also has an interesting article on the subject and Coyle's book at https://www.ft.com/content/dd2ec158-023d-11e4-ab5b-00144feab7de.

Dear Mr. Kunnas,

Probably, you can consider that GDP become the ultimate policy goal after Bretton Woods Agreements, but if you want to have your own oppinion, I suggest you to read this book about the history of GDP:

https://books.google.es/books?id=t7pKCAAAQBAJ&dq=about+GDP&lr=&hl=es&source=gbs_navlinks_s

Also, the first part of this document with a brief history of GDP and other indicators proposed under the so-called Beyond GDP framework:

https://www.bu.edu/pardee/files/documents/PP-004-GDP.pdf

Best wishes,

Pedro.

As noted earlier, Diane Coyle's GDP: A Brief but Affectionate History (2nd Edition, Princeton University Press, 2015) answers this query. The Financial Times also has an interesting article on the subject and Coyle's book at https://www.ft.com/content/dd2ec158-023d-11e4-ab5b-00144feab7de.

Dear Juan, Hello,

I believe that human activities have economic repercussions (either spending money or making money). These activities are different in terms of nature, purpose, type, scale, etc. And since human activities in any country are organized by the political authorities, then the gdp a criterion for measuring the impact of its activities on the country's economy. this criterion allows the political authorities to correct the adopted policy, etc.

With my best wishes.

Dr. Adel OUESLATI

My background teaches me that maintanance of relative stability in domestic price, satisfactory BoP postion, full employment of resources and sustained growth in GDP are the traditional macroeconomic goals. The attainment of some of these goals are complementary while others are antagonistic. For instance we cannot achieve employment and price stability together. My humble opinion.

GDP most commonly used indicator in international economic comparisons.

Besides concrete explanation given above, of course GDP has its shortcoming. As for underdeveloped countries GDP is not the one and only measurement since most of the economic activities deals with productions of goods and services can be captured accurately. It would be great if some one can come up with different measurement for this purpose.

There is a recent and critical book on the history of the GDP. you may find profitable to have a look at it.

Fioramonti:" Gross Domestic Problem: The Politics Behind the World's Most Powerful Number "

It shows why and how it was adopted and became dominant.

https://www.amazon.com/Gross-Domestic-Problem-Politics-Controversies/dp/1780322720

Besides concrete explanation given above, of course GDP has its shortcoming. As for underdeveloped countries GDP may not be proper or is not the only measurement since most of the economic activities deals with productions of goods and services can not be captured accurately and comprehensively. It would be great if some one can come up with different measurement for this purpose particularly in underdeveloped countries.

@Kasim. There are several attempts to come up with a different system of measurement than the GDP. you can check the Stiglitz/Sen/Fitoussi commission on that:

http://ec.europa.eu/eurostat/documents/118025/118123/Fitoussi+Commission+report

The report explains well the issues, but the outcome is somewhat disappointing because in the end... they just propose to add some "cosmetic" indicators to the GDP.

From a broad criminological perspective (read regarding -environmental, social, individual- harm production under current conditions imposed by the globalised accumulation regime), GDP could be defined as a key 'scientific' element enabling economics to provide an adequate source of ideological legitimacy to what's been called 'The Crimes of the Economy' (Routledge 2013) by Vincenzo Ruggiero. This would therefore be one of the necessary conditions through which 'growth' (purely economic concept) had been commonly identified with 'development' (social concept - by definition), and a distorted idea of 'human progress' could had been subsumed under purely economic premises, both across so-called 'underdeveloped', ''developing', 'developed' and also 'underdeveloping countries' (as in the case of the PIGS in the European periphery or 'Southern North' - where the gap between 'GDP growth' and 'social degradation' appears to be wider and wider under the current 'New Normal' - on the concept of 'New Normal' and the limits of capitalism, see McNally, D. or Charnock, G. et al).

Hello.

I tend to link GDP to Keynesian type of regulation, as an answer to the 1929 crisis.

It became a key indicator because of its inclusiveness: thanks to the various national identities, GDP and its disaggregation in several sub-accounts allow to monitor (and influence, in the Keynesian tradition), consumption, investment, savings, external accounts. Plus it allows looking at both the demand side and the supply side of an economy.

Alternative indicators (of business cycle, in the early US tradition, or other more modern indicators looking at distributional impacts) do not have this holistic perspective.

As it is obvious when reading the comments, national accounts and GDP have been receiving a lot of flack. From the Liberal side, at the beginning (it was a tool for State intervention) and from the Statists today (it does not take into consideration distribution impacts between male and female, rich and poor).

Why is it surviving? The easy answer is "it is the worst indicator, excepting all the other ones". A more articulated answer could be: a lot of social and environmental indicators remain correlated with GDP: the higher the GDP/capita, the lower the incidence of pauverty; the higher the share of services in high-income coutries, the smaller the gap between male and female wages at similar jobs; the higher the GDP/capita, the lower the marginal impact of growth on environment (also called the environmental Kuznets curve).

Conclusion: there is no substitute to GDP, but a lot of satellite accounts that complement it (on environment, labour, etc.) and provide specific view of some points of interest, while maintaining an overall coherence between all accounts).

I know, it is not fun nor revolutionary. National accountants are usually not very funny and tend to be conservative. Sorry.

Best.

@Hubert. Indeed, the GDP is linked to the 1929 economic crisis. There was a conscious demand from the American government to develop new indicators to fully grasp the extend of the crisis. Fioramonti, in the book I mentioned earlier, shows how the GDP was used by the American government to better plan the economy during WWII -- keeping consumption as it was and at the same time develop military equipment. But it is only after the war that the GDP became the powerful tool it is now, as some of the military industries had to be redevelop into civilian ones (despite the cold war and the Korean war) -- pushing domestic consumption and exports (eg the Marshall plan, etc.). So, it is only little by little that it took its full significance, even though it was developed in the aftermath of the 1929 crisis.