GDPle

GDPle is a hypothetical macroeconomic metric used in theoretical economics and policy simulations to compare economic performance while incorporating sustainability and equity considerations into a single index.

Definition and formulation: GDPle stands for GDP-level, a composite index that adjusts real GDP by two factors: environmental sustainability and income distribution. A simple formulation is GDPle = Real GDP × S × I, where Real GDP is inflation-adjusted output, S is an environmental sustainability factor ranging from 0 to 1, and I is an inequality-adjustment factor also from 0 to 1. S reflects resource use efficiency, carbon intensity, and ecosystem pressure; I reflects the degree of income equality, often derived from the Gini coefficient mapped to a 0–1 scale.

Data and interpretation: Because S and I are policy-sensitive and data-limited, GDPle is not a standard metric and is used mainly in academic exercises or scenario analysis. Data sources mirror those used for the underlying real GDP and the sustainability and inequality indicators. The index is intended to illustrate how growth might be perceived when environmental and distributional factors are considered.

History and use: The term and concept have appeared in academic papers and classroom simulations as a thought experiment to discuss trade-offs between growth, sustainability, and equity. It is not widely adopted in official statistics.

Limitations: GDPle depends on arbitrary choices for S and I, and different researchers may assign different mappings from indicators to 0–1 scales. It also risks conflating distinct concepts such as ecological impact and social welfare. Nevertheless, GDPle can help illuminate policy implications in hypothetical scenarios.

Example: If Real GDP is 2 trillion, S = 0.85, and I = 0.75, then GDPle = 2 × 0.85 × 0.75 = 1.275 trillion.

See also:

- Genuine Progress Indicator

- Green GDP

- Human Development Index

- Gross National Happiness