Question

Economists have predicted that the outbreak of COVID-19 will lead to large decreases in the gross domestic product (GDP) of many countries. Discuss the pros and cons of using GDP to measure the impact of COVID-19 on economic activity.

Answer 1

Many economists all over the world have predicted GDP will decrease large amount due to outbreak of this COVID-19. Generally GDP are using to measure the impact of this pandemic. There is some pros or advantages to measure the impact of this COVID-19 on economic activities.

Pros- (a) GDP provides easy and better analysis of all economic activity of a nation. It gives an idea of overall economic condition of the economy and easily we can measure the increase and decrease of wealth.

(b) GDP actually helps policy makers to give an idea how the economy can change through this decrease in GDP of the country. On the basis of this policy makers can take decision and set different policies based on this.

(c). GDP actually measure economic power of the nation and if GDP decrease then how this decrease in GDP has post pandemic impact on the economy. How this GDP can affect the overall economic condition and economic well being of people. It also helps to know the level of job loss we can face due to decrease in this GDP.

Cons - (a). This GDP measure has some drawbacks like this GDP can not take into account all the job losses we face in all sectors. How different sectors have affected and how different labourers at low economic profile can affected through this decrease in GDP. The extent of their vurnability can not measure through GDP.

(b). We can not measure the different non-economic and volunteer activities which will be provided to save different lifes and save the economy through this decrease in GDP.

(c). By this GDP measurement we can not get the impact of different sectors of the economy and people lives in different profile of the economy. It can not give an idea how a poor people , middle class people and high class people get affected through this decrease in GDP. It will give an overall situation but can not tell the exact impact on different section people.