GDP...an old way to measure
We have trouble measuring ideas and goods. An example is, I'm here at the World Economic Forum in Davos, Switzerland, I can speak to my children using different kinds of media, it costs almost nothing. People can speak to their relatives around the world; businesses can speak to each other. There are kinds of innovations that we don't measure very well, particularly ones that relate to consumers, but also some that relate to businesses.
The old way of measuring – gross domestic product – was good at measuring cars, how many houses we build, certain other things. But it's getting farther and farther from what we really think of as economic progress.
Of course, there are other issues like equality. Economic welfare depends not just on the total income the society has but how it's distributed. We can't get all this in one measure, but we could have better measures of what we have in society. We certainly should use measures of how equally it's distributed more in determining policy.
More from Weforum what happens when there is another financial crisis (note the when not if) from Kenneth Rogoff, Professor of Public Policy and Professor of Economics at Harvard University, and former chief economist of the IMF