Answer to Question #59809 in Macroeconomics for patrick

Question

The Index of Sustainable Economic Welfare (ISEW) have been proposed as an alternative to a country’s Gross National Product (GNP) or Gross Domestic Product (GDP). What is the effect of using that measure on calculations of economic growth over the last 20 years?

Answer 1

The Index of Sustainable Economic Welfare (ISEW) is an economic indicator intended to replace the GDP. Rather than simply adding together all expenditures like the GDP, consumer expenditure is balanced by such factors as income distribution and cost associated with pollution and other unsustainable costs.
According to results sustainable economic welfare rose steadily in the 1970s and early 1980s, but since has declined and stabilized.