Productivity Measures and Sustainable Prosperity

Abstract

The government of Korea is striving to achieve more rapid,

and sustainable, increases in economic output. We begin by

reviewing measures national governments can use to monitor

progress toward achieving sustainable prosperity. The various

indexes each involve a comparison of some measure of total

output volume with a measure of the total volume for specified

input factors.

The total output measure most used by national statistical

agencies is gross domestic product (GDP). We recommend other

output measures that would better capture exchange rate

effects, efficiency gains in intermediate product use, and the

depreciation of durable assets. The recommendations concerning

the treatment of durables are of special relevance for monitoring

progress toward sustainable prosperity. We also report on

progress toward accounting for the use of natural resource

assets and human environmental impacts. We conclude with

some thoughts on the meaning of sustainable prosperity and

options for achieving this.