How Should We Measure Economic Growth and Wellbeing?
A one-week seminar on the most consequential number in public life. Students learn what GDP actually measures, watch it correlate with life satisfaction well enough to be useful and badly enough to be suspect, then see it rise for thirty years while median incomes stall. The week ends with the exercise the deck is really built around: design a better indicator, and work out what a country would start doing differently if it were used.
Open the student page for this topicOne-Week Instructional Plan
The Year 1 seminar rhythm, with one addition: this topic carries a design activity — students build their own economic indicator — which the deck says can run either as a whole-class discussion or as a ten-minute small-group task. It works best in Tuesday's breakout, so groups arrive Wednesday with something to defend.
Free Write, Then Work the Data
Free write (5 min): how would you tell whether a country is doing well? Students answer before they meet GDP.
Key terms first — inflation (prices rising over time, so $100 buys less next year than this year) and GDP per capita (total GDP divided by population). Get these down before the charts.
Data work. The deck's three charts build a case in sequence, and the teaching notes are explicit about each:
- Slide 6 — GDP per capita in five countries. The US and Lithuania rise with a dip around 2008; China grows very consistently; Congo and Lebanon stagnate or fall in recent years. Ask what makes GDP go up and what makes it go down.
- Slide 7 — GDP against life satisfaction. Generally positive, with a lot of scatter. The intended takeaway is precise: GDP is a relatively good indicator of wellbeing, not a perfect one. Ask whether the relationship is causal.
- Slide 8 — GDP against median incomes. Since 1990 GDP has grown substantially while incomes largely stagnated. This is the slide that does the damage: if GDP can climb without reaching people, what is it telling us?
Then the alternatives: what are other measures trying to capture that GDP doesn't? The Human Development Index gets its own treatment — what it measures, how it differs from GDP, and its own pros and cons.
Assign the readings — due before Tuesday, also linked in Canvas:
- Why GDP Is No Longer the Most Effective Measure of Economic Success — World Finance
- In Defence of GDP — Friends of Europe
- How Not to Measure Happiness: Alternatives to GDP — HEconomist
- What Is GDP and How Is It Measured? — BBC (background, referenced on the deck)
Breakouts: Build a Better Indicator
Mindful moment (5 min), then breakouts. Groups first take a position on whether GDP should remain the headline number, then do the design task.
The design activity, in two passes — the deck is specific that both matter:
- Pass one, no constraints. Assume every piece of information is freely available. What belongs in your ideal measure of a country's economic wellbeing? Encourage genuinely creative answers here; the constraint-free version is where the thinking happens.
- Pass two, real constraints. Now allow only data that could actually be collected. What survives, and what did you have to drop? This is where students discover why the world uses imperfect measures.
Open the Discussion
Mindful moment (5 min), then whole-group seminar on the deck's questions:
- What does GDP not account for? Is that a problem?
- Most of the readings argue GDP is a poor measure — so why is it still used everywhere? What are its actual advantages?
- Groups present their indicators. What did you include, and what does yours have over GDP?
- If a new measure replaced GDP, how would government policy change? Would governments be chasing different goals?
The second question is the one to protect. It's the corrective to a room that has decided GDP is worthless.
Before students leave: themes, lingering questions, and one new resource for Thursday.
Student-Sourced Evidence
Mindful moment (5 min), then students share what they found and log each other's links.
Thursday is for the tradeoff the design activity surfaces and doesn't resolve: a measure that captures more of what matters is usually slower, more expensive, more contested, and easier to manipulate. GDP's real advantage is that it's comparable across countries and across decades. Ask each group what their indicator would cost in comparability — and whether the trade is worth making.
Score Your Participation
The four reflective questions, then the participation matrix. Students also use the participation rubric to score the week and explain the score.
Notes for the Guide
The deck's teaching notes name one failure mode directly: the discussion turning into a wholesale dismissal of GDP. That outcome feels like critical thinking and isn't. Students should leave able to explain why GDP is used, not just why it's criticized.
Protect the Case for GDP
- Assign In Defence of GDP as carefully as the critiques. If every reading a student does is anti-GDP, Wednesday has no argument in it.
- GDP's advantages are real: it's well-defined, collected consistently, comparable across countries and decades, and updated frequently. Few alternatives manage even two of those.
- Slide 7 supports GDP more than students expect — the correlation with life satisfaction is genuinely positive. Don't let the room skip past it to get to slide 8.
Run the Design Activity Properly
- Both passes, in order. Groups that jump straight to "what data exists" produce a shorter GDP. Groups that start unconstrained produce something worth arguing about.
- Ten minutes is enough for a first draft. The value is in defending it Wednesday, not in polishing it.
- Ask every group the same follow-up: what would a government do differently if your number were the one on the news?
Where Discussion Tends to Go
- "GDP ignores happiness." True but shallow. Push toward what it means to measure happiness at national scale, and whether self-reported satisfaction can bear that weight.
- Correlation and causation. Slide 7 invites the causal claim directly. Does money make people satisfied, or do satisfied countries produce more?
- Average vs. median. Slide 8 is really a distribution argument. Students who spot that GDP per capita is a mean have found the sharpest critique available.
Adapting This Topic
- Short week: the deck notes the HDI video can be skipped.
- Whole-class variant: run the indicator design as one shared discussion instead of in groups if breakouts aren't working for your section.
- Going deeper: the Freakonomics episode on doughnut economics and the Diane Coyle interview both give students a serious alternative framework rather than a complaint.
- Pairs well with: Is the World Getting Better? — same underlying question about which numbers deserve to stand for human welfare.