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The Editors

GDP: An Imperfect Measure of Progress

Which is better for a country’s well-being: $10 million spent constructing a jail, or $10 million spent producing a line of smartphones? How about clear-cutting rain forests to produce $10 million in lumber? Or a storm that requires $10 million in repairs?

Using today’s most common shorthand of national welfare, gross domestic product, all of the above are equal. GDP measures only output, and makes no claims on the quality of that output, let alone on subjective concepts such as social progress or human happiness. It does what it was intended to do -- offer a value of marketed goods and services produced in a country in a given time frame -- and does it reasonably well.