ALTERNATIVE MEASURES OF ECONOMIC GROWTH AND PROGRESS
ALTERNATIVE MEASURES OF ECONOMIC GROWTH AND PROGRESS
What are some limitations of the Gross Domestic Product measure and some ideas for improving it?
GDP has four major limitations:
It includes the replacement of depreciated capital.
It measures income produced in a country but not how much income people in that country re-ceive.
Since GDP only counts monetary transactions (including esti-mates for those in the shadow economy), it misses many other ac-tivities that people value like caring for children or elderly at home. GDP includes many items that do not boost human well-being.
For improve it:
Adjusting GDP.
Replacing GDP.
Supplementing GDP.
Other indicators:
Measure of Economic Welfare.
Index of Sustainable Economic Welfare.
Genuine Progress Indicator.
Human Development Index.
Ecological Footprint.
Genuine Savings Indicator.
Happy Planet Index.
Satellite accounts.
Genuine Progress Indicator
GPI figures cannot be derived without the GDP numbers and both can complement each other very well.
Measurements that make up the GPI include:
Income Distribution
Housework, Volunteering, and Higher Education
Crime
Resource Depletion
Pollution
Long-Term Environmental Damage
Changes in Leisure Time
Defensive Expenditures
Lifespan of Consumer Durables & Public Infrastructure
Dependence on Foreign Assets
If instead of Gross Domestic Product (GDP), for the individual there is no one gonna pay tax (individual, business) if people and business don’t pay tax then there is no government and there is no pension and city construction etc because the gonvernment don’t have money. Foreign capital gonna get lower.
References
Redefining Progress - Genuine Progress Indicator. (n.d.). Redefining Progress the nature of economics. Retrieved October 1, 2013, from http://rprogress.org/sustainability_indicators/genuine_progress_indicator.htm
APA formatting by BibMe.org.
What are some limitations of the Gross Domestic Product measure and some ideas for improving it?
GDP has four major limitations:
It includes the replacement of depreciated capital.
It measures income produced in a country but not how much income people in that country re-ceive.
Since GDP only counts monetary transactions (including esti-mates for those in the shadow economy), it misses many other ac-tivities that people value like caring for children or elderly at home. GDP includes many items that do not boost human well-being.
For improve it:
Adjusting GDP.
Replacing GDP.
Supplementing GDP.
Other indicators:
Measure of Economic Welfare.
Index of Sustainable Economic Welfare.
Genuine Progress Indicator.
Human Development Index.
Ecological Footprint.
Genuine Savings Indicator.
Happy Planet Index.
Satellite accounts.
Genuine Progress Indicator
GPI figures cannot be derived without the GDP numbers and both can complement each other very well.
Measurements that make up the GPI include:
Income Distribution
Housework, Volunteering, and Higher Education
Crime
Resource Depletion
Pollution
Long-Term Environmental Damage
Changes in Leisure Time
Defensive Expenditures
Lifespan of Consumer Durables & Public Infrastructure
Dependence on Foreign Assets
If instead of Gross Domestic Product (GDP), for the individual there is no one gonna pay tax (individual, business) if people and business don’t pay tax then there is no government and there is no pension and city construction etc because the gonvernment don’t have money. Foreign capital gonna get lower.
References
Redefining Progress - Genuine Progress Indicator. (n.d.). Redefining Progress the nature of economics. Retrieved October 1, 2013, from http://rprogress.org/sustainability_indicators/genuine_progress_indicator.htm
APA formatting by BibMe.org.
References: Redefining Progress - Genuine Progress Indicator. (n.d.). Redefining Progress the nature of economics. Retrieved October 1, 2013, from http://rprogress.org/sustainability_indicators/genuine_progress_indicator.htm APA formatting by BibMe.org.