Beyond GDP: What counts for economic & social performance? Understanding different daily life challenges of Europeans

Brigitte Mohn opened the high-level event with a welcoming speech and introduced the theme of the evening. She stressed that the Covid-19 crisis has affected many sectors. She said that it was therefore essential to promote and strengthen a more resilient Europe by investing in the international balance of power and competition. She highlighted the aspect of well-being as a fundamental challenge of our time and advocated that there should be other indicators besides GDP to measure real welfare. Due to the crisis, this was more important than before.

Christian Kastrop, State Secretary in the Federal Ministry of Justice and Consumer Protection, moderated the first part of the event. He emphasized the importance of the work of the HLEG in these days. Unfortunately, indicators beyond the "hard" macroeconomic indices had not been considered in politics and economics for a long time. Due to the corona crisis, inequalities would continue to increase and therefore new methods of welfare measurement would be of great importance.

Nobel Laureate and HLEG Co-Chair Joseph E. Stiglitz then explained in detail the results of the latest HLEG report. Better statistics and measurements of well-being are first of all necessary to be able to react to new challenges to an appropriate extent. The analyses had shown that simply measuring income changes did not reflect real life situations. In order that future measures are better adapted to the needs of society and that economies become more crisis-resistant, research on welfare and its components must be further deepened. In general, it is important that in times of crises, governments do not abandon their supportive measures in light of the first signs of economic recovery, but rather continue to pursue them to avoid a new recession. In view of the current health crisis, Stiglitz called for sustainability and resilience as well as for a strengthened confidence in European institutions. To achieve this, he said, the top priority was now to incorporate the concept of well-being into the political response to the crisis.

The second part of the event was moderated by Martine Durand, also HLEG Co-Chair and former OECD Chief Statistician. She introduced the panel discussion in which lessons for policy making were drawn. The panel included Prof. Stiglitz, Wolfgang Schmidt, State Secretary at the Federal Ministry of Finance, the OECD Chief of Staff and G20 Sherpa Gabriela Ramos, the Chief Economist of the Scottish Government Gary Gillespie and the President of the Global Solutions Initiative Dennis Snower. Schmidt stressed that to the familiar "Three T's" - "timely, targeted, temporary" - of economic development a fourth - "transformative" - must be added as a result of the current crisis. From the past we have learned to react quickly and courageously and to make full use of the available fiscal space at national level. However, the Covid-19 crisis also requires coordinated reaction at EU level, as no member state would survive on its own. Ultimately, however, it will take up to two years before we can see the full extent of the crisis.

During the discussion, Stiglitz pointed out that the current crisis represents a possibility for reorientation. The world before corona was already marked by many inequalities, which would now become even more apparent. Therefore, it was important not to return to our pre-crisis state, but to achieve a new, better status quo. Sufficient supportive and sustainable government spending is essential to avoid repercussions of the crisis. Gabriela Ramos centred her contribution to the discussion on the statement that there is already a political dimension in the decision about what is measured. She pointed out that the time had come for sustainable growth and pointed out that better regulated markets were needed. Gary Gillespie presented the Scottish approach to translating welfare into policy. An important aspect was to ask citizens about their values and well-being. Dennis Snower pointed out that promoting change is important to avoid "zombie economies" as a result of the corona crisis. Also, the promotion of social security mechanisms was necessary. Concerning the great dependence on modern technologies and digital infrastructure, he added that the development of digital property rights was particularly important.

After the panel discussion, questions from the audience were answered. These included the question of whether supporting state expenditures should be linked to conditions, but also the extent to which one could currently support developing countries. The panellists mentioned, for example, the importance of an active labour market and industrial policy as well as the retraining of workers to support technological change. Furthermore, the opportunities in designing the tax system and the role of government direct investment, which can be linked to long-term objectives such as climate protection, should be used. All agreed that measuring well-being is not only about statistics but above all about making positive changes to people's individual lives.

The video to the event can be found here.