Our fees are changing on 4 March 2023. Learn more.


Share

Improving GDP

Gross Domestic Product (GDP) is an economic metric created for a bygone age. In a world where up to 80% of production from advanced economies comes from services and not manufacturing, GDP is incapable of properly measuring performance.

Organisations are slowly growing wise to the problems of GDP-based results. In 2019, the Organization for Economic Cooperation and Development (OECD) admitted that GDP couldn’t account for 40% of its 2030 Sustainable Development Goals (SDGs) metrics. 

One of the replacement frontrunners is economic wellbeing. Instead of a single overarching metric, economic wellbeing looks at several to determine a citizenry’s quality of life.

In 2019, the OECD’s Secretary-General defined economic wellbeing as the ‘capacity to create a virtuous circle in which citizens’ well-being drives economic prosperity, stability and resilience, and vice-versa’.

While there is no standard method of calculating economic wellbeing, the OECD’s approach seems to be in the lead. For example, it’s repeatedly cited by the Australian Bureau of Statistics (ABS), and New Zealand embedded ‘wellbeing indicators’ in its 2019 budget process. Currently, the OECD index looks at 11 key indicators: housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety and work-life balance.

GDP has been challenging to replace, primarily due to its universal acceptance. The OECD has been working towards a better model since the 1970s. Though its economic wellbeing index remains in development, investors should keep it in mind and take GDP results with a grain of salt.


Don’t have Stake?

Get $10 when you fund Stake AUS, a free US stock when you fund Stake Wall St. Do both, get both!


Stake logo
Download Stake
App Store logo
Google Play logo

Stakeshop Pty Ltd is registered as an overseas company in New Zealand (NZBN: 9429047452152), and is registered as a Financial Service Provider under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (No. FSP774414). We hold a full licence issued by the Financial Markets Authority to provide a financial advice service under the Financial Markets Conduct Act 2013. However, the content on this website has not been prepared to take into account any of your individual objectives, financial situation or needs. To the extent you require further information about the relevant New Zealand legislation that may apply, or require specific advice, please contact your legal and/or financial adviser (as appropriate). The information on our website or our mobile application is not intended to be an inducement, offer or solicitation to anyone in any jurisdiction in which Stake is not regulated or able to market its services. At Stake, we’re focused on giving you a better investing experience but we don’t take into account your personal objectives, circumstances or financial needs. Any advice is of a general nature only. As investments carry risk, before making any investment decision, please consider if it’s right for you and seek appropriate taxation and legal advice. Please view our Terms & Conditions, Privacy Policy, Financial Advice Disclosure and Disclaimers before deciding to use or invest on Stake. By using the Stake website or service in any way, you agree to our Privacy Policy and Terms & Conditions All financial products involve risk and you should ensure you understand the risks involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance. Stake is a registered trademark under class 36 (New Zealand).

Copyright © 2023 Stake. All rights reserved.