new instruments to measure the efficiency of the French financial system past GDP | EUROtoday

To what extent does the French redistributive system scale back inequalities? What is the financial value of local weather change? To these questions which permeate financial and political debates, the National Institute of Statistics and Economic Studies (Insee) will now try to offer some solutions by way of “expanded” indicators and so-called “augmented” accounts. A means of giving one other dimension, environmental or social, to the drought of nationwide accounting figures.

An indication of the significance of this venture for INSEE, its director common, Jean-Luc Tavernier, was eager to current the strategy himself throughout a press convention on Tuesday November 5.

INSEE, defined Mr. Tavernier, relied on the conclusions of the so-called “Stiglitz-Sen-Fitoussi” fee to hold out this work, chaired by the economist Joseph Stiglitz. Set up by President Sarkozy in 2008, its mission was to steer a “reflection on ways to escape an overly quantitative, overly accounting approach to measuring our collective performance”.

Calculation technique

This revolutionary strategy constitutes an evolution, not a revolution. “We did not seek to construct a synthetic indicator that would replace gross domestic product (GDP)”declared Mr. Tavernier right away. This one stays ” unavoidable “. “The national accounts and their flagship indicator – GDP – are an established and recognized reference, [ils] retain all their interest, but [ils] require to be completed and [doivent] better take into account the environmental and social dimensions”, specifies the establishment in its press launch.

For the primary version of this new era of indicators, meant to be printed yearly, the Institute’s consultants centered particularly on “extended” redistribution and its impression on inequalities between households. “We are not limiting ourselves to the usual street light, namely direct debits and cash transfers on which INSEE has already published”specified Mr. Tavernier. In this new technique of calculation, the impression of public companies on family revenue and lifestyle is, for instance, taken into consideration.

The outcomes are then spectacular. In 2022, earlier than redistribution, the “extended primary income” of the richest 10% of individuals was virtually 24 occasions increased than that of the poorest 10%. But, after the implementation of those redistribution mechanisms, equivalent to tax levies, social advantages or the availability of public companies, the ratio between essentially the most well-off and essentially the most modest is simply 3.8.

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