{"id":23230,"date":"2024-08-16T15:05:51","date_gmt":"2024-08-16T09:35:51","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=23230"},"modified":"2024-08-16T15:05:51","modified_gmt":"2024-08-16T09:35:51","slug":"gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2\/","title":{"rendered":"GDP @ 70: Does GDP Methodology of Calculating Growth Requires a Serious Shift? | Ethics for UPSC Civil Services Examination | Triumph IAS"},"content":{"rendered":"<h1 style=\"text-align: center;\"><span style=\"font-family: georgia, palatino, serif;\"><strong><span style=\"color: #ff0000;\"><b><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-22780\" src=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/07\/A-Comprehensive-Classroom-cum-Test-Series-1-150x58.png\" alt=\"\" width=\"986\" height=\"381\" srcset=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/07\/A-Comprehensive-Classroom-cum-Test-Series-1-150x58.png 150w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/07\/A-Comprehensive-Classroom-cum-Test-Series-1-300x115.png 300w\" sizes=\"auto, (max-width: 986px) 100vw, 986px\" \/><br \/>\n<\/b><\/span><\/strong><\/span><\/h1>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_68 ez-toc-wrap-center counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >What's Inside this Blog!<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/triumphias.com\/blog\/gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2\/#GDP_70_Does_GDP_Methodology_of_Calculating_Growth_Requires_a_Serious_Shift\" title=\"GDP @ 70: Does GDP Methodology of Calculating Growth Requires a Serious Shift?\">GDP @ 70: Does GDP Methodology of Calculating Growth Requires a Serious Shift?<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/triumphias.com\/blog\/gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2\/#Relevant_for_Public_Ethics_Integrity_and_Aptitude\" title=\"[Relevant for Public Ethics, Integrity and Aptitude]\">[Relevant for Public Ethics, Integrity and Aptitude]<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/triumphias.com\/blog\/gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2\/#EthicsBlogoTerms\" title=\"#EthicsBlogoTerms\">#EthicsBlogoTerms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/triumphias.com\/blog\/gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2\/#Related_Blogs_%E2%80%A6\" title=\"Related Blogs &#8230;\">Related Blogs &#8230;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/triumphias.com\/blog\/gdp-70-does-gdp-methodology-of-calculating-growth-requires-a-serious-shift-2\/#Find_More_Blogs%E2%80%A6\" title=\"Find More Blogs&#8230;\">Find More Blogs&#8230;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"GDP_70_Does_GDP_Methodology_of_Calculating_Growth_Requires_a_Serious_Shift\"><\/span><span style=\"color: #ff0000;\"><strong><span style=\"font-family: georgia, palatino, serif;\">GDP @ 70: Does GDP Methodology of Calculating Growth Requires a Serious Shift?<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Relevant_for_Public_Ethics_Integrity_and_Aptitude\"><\/span><span style=\"font-family: georgia, palatino, serif;\"><span style=\"font-size: 24px;\"><em>[Re<span style=\"font-size: 20px;\">levant for Public <\/span><\/em><\/span><span style=\"font-size: 20px;\"><em><strong style=\"font-weight: bold;\">Ethics, Integrity and Aptitude<\/strong><\/em><em><b>]<\/b><\/em><\/span><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23190\" src=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/a-150x71.jpg\" alt=\"GDP @ 70: Does GDP Methodology of Calculating Growth Requires a Serious Shift?\" width=\"813\" height=\"385\" srcset=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/a-150x71.jpg 150w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/a-300x142.jpg 300w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/a.jpg 448w\" sizes=\"auto, (max-width: 813px) 100vw, 813px\" \/><\/p>\n<h3 style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\"><strong>GDP @ 70: Does GDP Methodology of Calculating Growth Requires a Serious Shift?<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Researchers advocating reform of the world\u2019s main measure of growth have an opportunity to participate in the process that sets the rules.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Is \u2018sustained\u2019 economic growth compatible with \u2018sustainable\u2019 economic growth?<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Architects of the United Nations Sustainable Development Goals (SDGs) clearly thought so \u2014 both sustained and sustainable growth are mentioned in the 8th of the 17 SDGs.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">But researchers focused on sustainability are increasingly questioning whether growth can continue indefinitely. Unless this debate can be settled, the ambition of SDG 8 to align economic and environmental policy is unlikely to be achieved.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">For decades, influential economists, central banks and financial institutions have regarded continuous economic growth, measured in terms of gross domestic product (GDP), as essential to national prosperity. But along the way, many researchers have questioned whether endless growth is benign for the planet. An early voice was <span style=\"color: #ff0000;\"><strong>Herman Daly<\/strong><\/span>, who died last year (read 2023).<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Almost 50 years ago, Daly wrote in one of his signature texts<strong>, <span style=\"color: #ff0000;\">Steady-State Economics (1977)<\/span><\/strong><span style=\"color: #ff0000;\">, <strong><em>that \u201cthe verb \u2018to grow\u2019 has become so overladen with positive value connotations that we have forgotten its first literal dictionary denotation, namely, \u2018to spring up and develop to maturity\u2019\u201d.<\/em><\/strong><\/span><\/span><\/p>\n<h4 style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif; color: #993366;\"><strong>Going \u201cBeyond GDP\u201d <\/strong><\/span><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Daly inspired a generation of researchers in the field of ecological economics. They are now among the leaders of a movement called <strong><span style=\"color: #ff0000;\">Beyond GDP<\/span>,<\/strong> which is drawing the world\u2019s attention to the problems of adopting a single index as a proxy for prosperity, and the need instead to consider a dashboard of indicators such as the SDGs.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Beyond GDP is now being championed by UN secretary-general Ant\u00f3nio Guterres, who has made it one of his priorities for his second term. And in May 2024, the European Parliament hosted a major conference at which researchers and policymakers discussed how the European Union can move beyond growth by integrating social and climate justice, equality and planetary boundaries into economic policymaking.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">According to the agreed indicators for SDG 8, the goal is a long way from being met. The target of 7% annual GDP growth for the least-developed countries \u2014 the \u2018sustained\u2019 portion of the goal \u2014 is a distant prospect.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Growth rates for these countries are forecast to hover at just above 4% this year, after being much lower during the COVID-19 pandemic.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Meanwhile, the \u2018sustainable\u2019 part of SDG 8 \u2014 as measured by the quantity of raw materials needed to meet consumption demands \u2014 is heading in the wrong direction. Although a number of high-income countries have been able to decouple growth rates from carbon emissions, the global material footprint is showing no signs of coming down. It is increasing at a greater rate than both population and GDP.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Here, all sides of the growth debate need to engage with each other\u2019s arguments, and on the basis of the evidence. There is currently an opportunity to do so through the international process for revising the methodology that determines what is measured by GDP.<\/span><\/p>\n<h4 style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif; color: #993366;\"><strong>Growing pains<\/strong><\/span><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">GDP can be measured in several ways. Under one common definition, GDP is calculated by adding together consumer spending, what governments and businesses spend and invest, and exports minus imports. If SDG 8 requires GDP to increase continually, that conflicts with any incentive for governments to reduce their material footprint or carbon emissions, because these and other harmful activities have a positive effect on GDP. As the economist<span style=\"color: #ff0000;\"> <strong>Kate Raworth<\/strong><\/span> writes in her 2017 book, <span style=\"color: #ff0000;\"><strong>Doughnut Economics<\/strong><\/span>, \u201cWe have economies that need to grow, whether or not they make us thrive; what we need are economies that make us thrive, whether or not they grow.\u201d<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">There could, however, be a way to reconcile the twin goals of SDG 8. What goes into GDP isn\u2019t set in stone. It is governed by rules that are set by an assembly of the world\u2019s national statistical offices, organized through the UN. Revisions don\u2019t happen often \u2014 there have been only 5 in the GDP formula\u2019s 70-year history. The most recent was in 2008. Talks on the next one are under way, and are expected to be concluded by March 2025.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">This revision to what is called the <span style=\"color: #ff0000;\"><strong>System of National Accounts (SNA)<\/strong><\/span> will differ from past revisions, partly because researchers are more involved. However, their engagement is still a fraction of that seen in many other UN processes. For example, scientists played a central part in the inception, implementation and monitoring of the SDGs, in the Paris climate agreement and in the UN\u2019s rules and guidelines on environmental accounting.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">UN-mediated agreements are open processes in which researchers and other observers can engage. They can, for example, comment on documents \u2014 the UN Statistics Division, based in New York City, which is administering the SNA revision talks, is publishing the working papers that will feed into the final text. These documents are organized by expert working groups on topics such as how to improve accounting for sustainability and well-being, and how to accurately put a value on the digital economy. The UN\u2019s Network of Economic Statisticians has a calendar of online outreach events that researchers can sign up to join.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: georgia, palatino, serif;\">Researchers are among the most passionate advocates of moving beyond GDP. The SNA revision offers them a chance to take this advocacy to the centre of decision-making and to engage with the economists and statisticians responsible for setting the rules. Change won\u2019t happen overnight, but, unless more researchers engage with those who advocate sustained growth and those who set the rules that define growth, it is unlikely to happen at all.<\/span><span style=\"font-family: georgia, palatino, serif; font-size: 1.125rem;\"> \u00a0<\/span><\/p>\n<hr \/>\n<h2><span class=\"ez-toc-section\" id=\"EthicsBlogoTerms\"><\/span>#EthicsBlogoTerms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Related_Blogs_%E2%80%A6\"><\/span><span style=\"font-family: georgia, palatino, serif;\">Related Blogs &#8230;<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table style=\"border-collapse: collapse; width: 100%; height: 353px;\">\n<tbody>\n<tr style=\"height: 353px;\">\n<td style=\"width: 50%; height: 353px;\"><a href=\"https:\/\/triumphias.com\/blog\/code-of-conduct-for-civil-servants\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23166\" src=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/Sociology-blogs-triumph-10-880x660-1-150x113.png\" alt=\"CAG red-flags financial losses to IR \u2013 An Ethical Issue concerning Financial Impropriety\" width=\"386\" height=\"291\" srcset=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/Sociology-blogs-triumph-10-880x660-1-150x113.png 150w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/Sociology-blogs-triumph-10-880x660-1-300x225.png 300w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/Sociology-blogs-triumph-10-880x660-1-768x576.png 768w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2024\/08\/Sociology-blogs-triumph-10-880x660-1.png 880w\" sizes=\"auto, (max-width: 386px) 100vw, 386px\" \/><\/a><\/td>\n<td style=\"width: 50%; 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