GDP vs EVA as an Economic Indicator

Abstract

This article discusses the limits and charactristics of GDP as economic indicator and suggests that an Economic Value Added (EVA®) approach would be more accurate and appropriate to measure macroeconomic performance. The main difference is that EVA® takes into consideration the invested capital cost of opportunity, while GDP is focused on quantity of production; an EVA® approach will be focused on the economic result of production activities. A final comment is made on the characteristics and limits of a GDP calculated using the EVA®GDP; Growth; Economic Value Added; EVA