GDP is so last century, and the search for a new economic yardstick is on
HONG KONG — GDP is so 20th century. The measure has risen from humble beginnings during the Great Depression to be an essential gauge for governments and central banks the world over.Long-term investors allocate capital based on its findings; traders buy and sell stocks, bonds, currencies and commodities in the blink of an eye after readings flash on their screens. One such closely watched report comes this Friday, when the US releases its revised estimate of second-quarter GDP.The problem is — whether compiled by production, income or expenditure approaches — GDP is increasingly struggling to keep up with the pace of economic change.READ THIS: Emerging economies need to harness the power of Big Data In an age where $10 can buy one compact disc or a month of unlimited music streaming, it is getting tougher to put a price on economic output. And as an aggregate measure that ignores distribution effects, GDP has masked rising inequalities that helped fuel anti-establishment politician...
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