Are there other proposals for better ways to measure the economy?

No one thinks GDP is perfect, and so many people/places have come up with their own ways to measure the economy, ranging from tweaks to full-on overhauls. Here are just a few of the many examples out there:

GDP Plus — Promoted by the Philadelphia Fed, GDPplus is a way of combining information from both GDP and GDI, creating a less-noisy series of growth estimates.

Green GDP — China introduced this measure in 2006 to measure its economic growth while accounting for environmental damage. The nation soon discontinued it, when the measure showed that growth in some areas was near-zero under the measure.

Genuine Progress Indicator — This indicator measures lots of the things that are not included in GDP but can profoundly affect people’s lives, like volunteering, pollution, crime, and income distribution. The idea behind GPI isn’t so much to measure the size of the economy, as GDP does, as it is to measure how people are experiencing life within an economy. Maryland and Vermont have both adopted this as one measure of well-being in their states, and other states are considering it as well.

Gross National Happiness — Bhutan famously measures how happy its citizens are, and has done so since the 1970s. The country measures well-being across several areas: education, psychological well-being, and good governance, for example. However, it appears GNH’s importance may be waning. Bhutan’s prime minister has signaled that he will focus more closely on GDP.