Part 2/14:
The lecture opens with an essential inquiry: In large-scale economic systems, what are we actually trying to optimize? Most existing KPIs, such as GDP and unemployment, serve as broad aggregate indicators, but they often conceal the nuanced realities of demand, ownership, and resilience.
GDP, originating from the 1930s, measures total transactions—assuming that higher consumption signifies a thriving economy. However, it overlooks whether demand stems from wages, property income, or transfers.
Unemployment rates and wages are also standard metrics, offering insights into labor market slack and income levels but become less reliable as automation reduces the significance of traditional jobs.