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Sancho Panza

Rising Uk Population Undermines Good News On Gdp Recovery, Ons Says

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Guardian 7/4/14

'Britain has recovered little of the ground lost during the deep recession of 2008-09 once a rising population is taken into account, the Office for National Statistics said.Announcing seven alternative ways of measuring economic well-being, the ONS said per capita gross domestic product remained well below its peak in 2013.

"Unlike GDP, which has now recovered substantially from the falls in the recent recession, GDP per capita has recovered only a little of the fall seen during the recession," the UK's statistical agency said.

It said GDP remained the "central and indispensible" measure of activity in the UK economy but said a "dashboard" of supplementary measures would help assess changes in wellbeing.

The ONS said these were:

– GDP per capita, which takes into account population growth

– Net Domestic product, which adjusts GDP for capital consumption

– Real Net National Disposable Income per capita, a measure that excludes income generated in the UK but which is not paid to UK residents

– Real Net Financial and Physical Assets, a measure of the stock of national wealth

– Real Adjusted Household Disposable Income per capita, which is the income received by UK households adjusted for inflation, taxes paid and benefits received

– Median real household income, which seeks to show whether the proceeds of growth are being evenly distributed by looking at the income received by the household in the middle of the income distribution

– Real Household Net Financial and Physical Assets, a measure of household wealth largely made up of housing and financial assets

The ONS said: "Given that it measures aggregate activity in the economy, GDP, supported by other information, inevitably and correctly plays a central role in discussion about monetary and fiscal policy and about the state of the economy generally. It is therefore of vital importance."

But it added: "At the same time, GDP has long known weaknesses as a measure of economic welfare or wellbeing."

The ONS said the UK's recent performance looked different depending on which "dashboard" measure was used.

While GDP is likely to exceed its 2008 peak during 2014, it said GDP per head was still 8% lower than it was before the recession. Real Net National Disposable Income per capita dropped from £23,000 before the crash to £20,000 in 2012, when it was still falling.

But Real Adjusted Household Disposable Income per head, which takes account of the monetary value of health and education services received free of charge, held up well during the deepest part of the recession. It then declined gently during the period when GDP was picking up.

The ONS said it was working on ways to improve the "dashboard" by including human capital and natural capital.'

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Damn statistics.

I voted for the tories because the promised to stop the insane immigration policy of labour, pyramid schemes are prone to fail.

I will be voting UKIP now.

Edited by TheCountOfNowhere

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It said GDP remained the "central and indispensible" measure of activity in the UK economy but said a "dashboard" of supplementary measures would help assess changes in wellbeing.

Why "central and indispensible"?

It's only central and indispensible as an easily manipulated electioneering device and that's why it's always pushed to the forefront. It's also a banker's index used all over the world and helps to push debt.

It's of little or no value in measuring how well the real economy is performing overall. GDP per capita doesn't suit the politicians in power because it shows that:

1. The UK's standard of living isn't that great compared to quite a few other nations - when compared to the hype.

2. The UK economy for most people is still lower than the peak in 2007 and hasn't improved much since the economic collapse - when compared to the hype.

A better measure might be something like Gross Domestic Wealth (GDW) to measure the sum of all assets including things like overall manufacturing output etc against debts etc. Unfortunately that would likely be less than zero and getting more negative every day.

If GDP (Gross Domestic Product) was called GDD (Gross Domestic Debt) then that might be more acceptable.

Edited by billybong

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The ONS said it was working on ways to improve the "dashboard" by including human capital and natural capital.'

Are they going to count trees and bunny rabbits? Shame they killed all those badgers.

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Are they going to count trees and bunny rabbits? Shame they killed all those badgers.

If they make people happy then they should. All the rest is irrelevent, it's how happy people are that really matters, it's just rather unfortunately hard or impossible to measure meaningfully.

GDP per capita sounds so obviously a more meanginful measure than plain GDP it's no surprise it gets ignored.

Edited by Riedquat

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