GDP as a measure of a nation's income

Do you think that GDP is a good instrument to measure a nation’s income ?

The GDP is a pertinent but imperfect indicator of how to measure a nation's income. It is pertinent because it enables to evaluate the market value of the goods and services produced, the set of the value added of all economic agents. However, in many ways it is a very imperfect indicator; to begin with, a large number of activities are not taken into account in the GDP such as voluntary work, domestic work (whereas hiring a maid is) and underground economy, these activities are usually part of wealth creation. Furthermore, if the GDP is incomplete due to its ignorance of the previous activities stated, it also embodies activities in the nation's income that do not create wealth, on the contrary. For example reparations and damage creation. If there is a car accident, the ambulance that comes, the car mechanics that must repair the car paid by the insurance money... all these contribute to the increase of the GDP because of the activities it generated. Another concrete example could be the damage to the environment that wealth creating activities generate, the GDP will not consider the social cost nor the long term impact that could be negative for wealth creation in the future (ex: a river rich in natural resources might not be exploited because a polluting nearby factory in the past made its use impossible. More concretely, taking your bike to go to work in the morning is not taken into account in the GDP whereas taking the taxi is). In addition to this, the price evolution is not always well appreciated to measure an increase in the GDP (in volume) because products evolve integrating innovations, therefore justifying the price increase. Another important argument, even though one might believe it should not be included in the strictest sense of the nation's income, is the qualitative aspect of the GDP (it does not measure the well being of the population), it ignores the living conditions of individuals (working conditions, inequalities in revenues, poverty, access to health and education, that are measured by another indicator created notably by the economist Amartya Sen, the HDI (human development index)), it also does not take into accounts the price difference in the different countries (an apple might cost 1 euro in America whereas it will cost 0.1 euro for an Indian living in India) ; considering this, many believe that a better indicator of wealth easily quantifiable of a country would be a GDP per capita with purchasing power parity; it is toward such considerations that the Stiglitz commission gave its conclusion to president Nicolas Sarkozy, advocating for a new measurement “placing the individual at the centre of all analysis”! Nevertheless, despite all its inherent limits outlined above, the current GDP is today the only indicator capable of measuring a nation's income as a whole, its growth and its impact in the world; the latter is a recent phenomenon (since 1750) and is very unequal as shows the Madison analysis where certain countries' and regions' income (EU, USA, Japan) grows so much more rapidly than others (African countries). Furthermore, it enables us to notice that it is characterized by an irregularity in time (high growth during the “30 glorieuses” in Europe and stagnant since 1980 for example).