National accounts and macroeconomic indicators

Abstract

This entry focuses on macroeconomic indicators to highlight their problems both in their descriptive use and in their frequent normative use. GDP only registers activities involving monetary transactions. For the calculation of GDP there is no estimate of the welfare obtained from ”goods and services”. Another criticism of the use of per capita GDP or per capita National Income as indicators of economic welfare is that they do not consider income distribution. Moreover, they tell us nothing about the environmental impacts caused by production and consumption activities and when environmental problems and risks generate economic costs, these costs can increase GDP and NI. Moreover, the depletion of natural resources is not considered in the calculation of net macroeconomic indicators. The conclusion is that the criticisms of GDP (and NI) are so many and so important that their use as indicators of economic and social success should be completely abolished.