In: Economics
response to Diane Coyle Is GDP Still Useful, regarding
using GDP as a measure of economic progress.
a. what's your reaction to Diane Coyle's comments and the
usefulness of GDP as a measure for comparing countries'
progress/well-being?
b. what supprised you about the rankings and comparisons regarding
the US?
c. are there other categories that should be incorporated into a
more complete well-being index?
d. of the categories included in the index which do you find most
important when making a comparison across countries regarding
well-being?
Ofcourse, using GDP as an indicator of economic growth is quite acceptable and widely used. But remember, there is a difference between GDP and GDP per capita. In the long run for indicating exoecono progress GDP per capita is having more correlation than GDP as a whole.
GDP just measures the total income and total expenditure of the economy. But only the per capita could give a natural and more realistic statistics regarding the economic well-being of the average person or individual.
Updation is very important. According to the changes the indicators should also be restructured. Rather saying GDP is not a worthy measure, it is a moderate partial method, and not 100% correct one, because, GDP doesn't make a direct involvement into some real factors of life. For example, the quality of education. But it measures the ability to get those quality education.
Recent statistics expressed that US has the world's super power economy and fetching the number one place since 1871. The size of America's economy is more than $20 trillion and expected to go to the hype of $22.32 trillions in 2020. And chinCis the second place after the United States. When you come to the purchasing power as an indicator of economy US would definitely missed it's first place to China. In 2019 the GDP( in PPP) of US is $21.44 trillion, whereas $27.31 trillion.
So this makes the normal people confused and leads to loosing hope on the economic measurements. There should be a perfect indicator which should consider every aspect of the fluctuations.
Definitely there are some other categories should be taken into consideration. First what is meant by well-being. Is it mentioning a healthy lifestyle or a luxury living. So everything should be properly distribute and described first. And remember we are living with trillions of poplpe, so everything would mean a unique meaning for everyone. So it is nearly impossible to act in such a way.
But some of the important categories are the quality education, healthy living, social ties, personal and mental health, satisfaction of live, satisfaction of work, well paid jobs creations, proper income for the respective work, which means the persons using their brain earning more than the persons using their physical work. So proper parameters should be drawn to equalise the peofits and earnings.