What is the 'Gross National Happiness - GNH'

The Gross National Happiness (GNH) is an aggregate measure of a country's national production, in the vein of the gross national product or gross domestic product. Gross national happiness (GNH) attempts to measure the sum total not only of economic output, but also of net environmental impacts, the spiritual and cultural growth of citizens, mental and physical health and the strength of the corporate and political systems.

BREAKING DOWN 'Gross National Happiness - GNH'

Not surprisingly, any measure of GNH is going to be rife with estimates. Things like the depletion of environmental resources, for example, are impossible to determine with accuracy. Other aspects, such as spiritual or cultural growth can only be measured by subjective, rather than objective, means.

As future economists work with the core values of GNH, new measures should allow investors to more accurately view the long-term effects not only of economic growth, but also the depletion of natural resources and the overall well-being of citizens. Green economics shares the same ideology and many of the same values as GNH creators and proponents.

The term was first attributed to Jigme Singye Wangchuck, the King of Bhutan in the early 1970s. Bhutan sought a measure of growth that reflected the nation's deep commitment to maintaining cultural, spiritual and environmental-sustainability standards. Updated measures of GNH try to incorporate variables that can be objectively measured in the hopes of applying them to the advanced economies of the Western world.

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