Question

The dire prediction of economic growth based upon the Classical growth model has not been very accurate. What is this prediction and why hasn't it they come true?

Answer 1

GDP is the final value of goods and services produced in a country. To measure its effectiveness as a measure to describe an economy's indicator, one must look both at its advantages and disadvantages and also the possible alternatives.
Advantages:
Using GDP as a measure of a nation's economy makes sense because it's essentially a measure of how much buying power a nation has over a given time period. GDP is also used as an indicator of a nation's overall standard of living because, generally, a nation's standard of living increases as GDP increases.

Disadvantages:
1. It doesn't count unpaid volunteer work.
2. Wartime disaster increase the GDP of the country.
3. It doesn't show the distribution of income among different people.
4. It doesn't show whether people belonging to a country having high GDP are happy or not.
5. It does not account for quality of goods.

If you measure India's GDP, it is the 10th richest country but this measure also does not take into account the purchasing power of people. By measuring GDP with respect to purchasing power parity, India becomes the 3rd richest in the world.
But then again, this measure has its drawbacks. One can't say for sure what all goods should be included to calculate it.
Human Development Index that can be used to measure economic progress. It uses statistics like life expectancy, education and income levels to measure a country's progress but then again it has its drawbacks like failure to include any ecological considerations, lack of consideration of technological development or contributions to the human civilization, focusing exclusively on national performance and ranking, lack of attention to development from a global perspective, measurement error of the underlying statistics, and on the UNDP's changes in formula which can lead to severe misclassification in the categorisation of 'low', 'medium', 'high' or 'very high' human development countries.
Bhutan uses yet another measure as an indicator. It is the Gross happiness Index which measures the happiness level of people in an economy. As cheesy as it might sound, it is very difficult to calculate something as qualitative as happiness.
That leaves us with just one measure i.e GDP.
Even though we are all well aware of its shortcomings, we don't really have a choice simply because it is the only thing that can be precisely calculated and can be used as a measure to compare economic progress of various countries.