Joseph Stiglitz argues that GDP isn’t really a very good measure of the health of an economy. Ezra Klein comments:
Stiglitz, happily, is involved in a French project to come up with a successor to GDP. But there have been many of these projects in the past and many alternatives proposed. The question isn’t developing these measures. It’s popularizing them.
I wish them the best of luck. In the meantime, however, I propose that instead of obsessing over GDP growth, we obsess over real median income growth. It’s simple and easy to popularize, and it could be made available quarterly, just like GDP. Here’s my hypothesis: If RMI is growing at a healthy clip, then the economy is almost certainly doing fine. If it’s not, then most people are going to be unhappy regardless of what GDP figures show.
I should note that I’m willing to accept any reasonable definition of “income” as part of the official RMI calculation. Regardless of what you include, the bottom line is that if we paid more attention to RMI, we’d all be a whole lot better off than we are now.
UPDATE: I originally said that RMI is available quarterly, which isn’t true. However, I imagine that estimates could be made quarterly if this were something we were more serious about tracking. The text has been corrected to reflect this.