August 7, 2012; Source: CNN Money

Is there a better way to measure how a nation is faring than its Gross Domestic Product? Scholars have suggested that this is the case for years, but now Federal Reserve Chairman Ben Bernanke is joining those calling for a more nuanced approached to how we take our nation’s pulse. “We should seek better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions,” Bernanke told the International Association for Research in Income and Wealth earlier this week at a Cambridge, Mass. conference. Bernanke went on to point to Bhutan’s Gross National Happiness index as a measurement that might be useful in taking more into account than a nation’s GDP. In addition, he mentioned the Organization for Economic Co-operation and Development’s “better life index.”

The suggestion that there might be a better way to measure a nation’s wellbeing is nothing new to many in the nonprofit sector whose work and worth is often not measured in dollars and cents. Ideas similar to the “better life index” have sprung up in the past, such as John Cobb and Herman Daly’s Index of Sustainable Economic Welfare (ISEW) in 1989 and Redefining Progress’ Genuine Progress Indicator (GPI) in 1995. Despite the promise of these measurement systems and their popularity with some in the nonprofit sector who have a defined sense of non-market societal value, they have never really achieved widespread acceptance in economics and business—but the concept has never before garnered the endorsement of the chairman of the Federal Reserve. Will Bernanke’s influence make a difference this time around? –Mike Keefe-Feldman