I have explained previously why I believe that real GDP is a rubbish measure of economic well-being (see here, here and here), and have argued that “economists’, the media’s, and the Government’s infatuation with GDP is one of the biggest shortcomings in macro-economics”.
Essentially, because real GDP measures volumes, Australia’s growth rate has been boosted significantly by the transition from the mining investment boom to an export boom as new mines have come on line, which completely ignores that fact that falling commodity prices has meant that real national disposable income (NDI) has been falling (see next chart).
