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September 15, 2009

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France counts the cost of well-being

FRANCE plans to include happiness and well-being in its measurements of economic progress, French President Nicolas Sarkozy said yesterday, inviting other countries to join a "revolution" in the way growth is tracked after the global economic crisis.

France will adapt its statistical toolbox as recommended by two Nobel economists whom Sarkozy commissioned 18 months ago to analyze new ways of measuring social progress, he said on the first anniversary of the collapse of Lehman Brothers.

France - whose growth has lagged its peers in recent decades - will also try to convince other governments to change their economic tracking, Sarkozy said

"A great revolution is waiting for us," he said. "For years, people said that finance was a formidable creator of wealth, only to discover one day that it accumulated so many risks that the world almost plunged into chaos."

"The crisis doesn't only make us free to imagine other models, another future, another world. It obliges us to do so," he said.

Measuring well-being would make France's economy, famous for its short working week and generous social benefits, look more rosy.

"If leisure has no accounting value because it's essentially full of non-market activities like sport or culture, we put productivity below human fulfillment," Sarkozy said.

Sarkozy asked American economist Joseph Stiglitz, winner of the 2001 Nobel economics prize and a critic of free-market economists, and Armatya Sen of India, who won the 1998 Nobel prize for work on developing countries, to lead the analysis of growth tracking.

Their report, delivered yesterday, recommends shifting emphasis from gross domestic product, which measures economic production, to well-being and sustainability.

The report recommends looking at household income, consumption and wealth rather than production in the economy as a whole for a better reflection of living standards. Non-market activities such as house cleaning should also be tracked, it says.


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