Last week everyone got a bit excited. The UK’s GDP, we were told, had finally hit its pre-crisis peak. We are now – hooray – as big as we used to be.
David Cameron and George Osborne called it a “milestone” and most papers reported it with happy exclamation marks. No one mentioned that the US hit the same milestone in 2011.
But if this announcement gave you great joy, perhaps it’s worth looking at just what GDP is. It is not a snap shot of an economy’s balance sheet. It doesn’t tell us our wealth. It measures [...]