Gdp Versus Hid
Some people believe that Gross Domestic Product (GDP) is an inadequate measure of societal well-being and should be replaced by the Human Development Index (HDI). Do you agree with them?
Essay:
One of the most controversial economic issues today is the role of Gross Domestic Product (GDP) and Human Development Index (HDI) in a country’s economy. There is a question about a particular aspect of the macro economy and societal well-being:
Some people believe that Gross Domestic Product (GDP) is an inadequate measure of societal well-being and should be replaced by the Human Development Index (HDI).
The following essay is to present our opinion about this ideal.
First of all, GDP is commonly defined as the market value of all the final goods and services produced in an economy within a period of time.
Though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments, exports and imports as well that occur within a defined territory. We have formula of GDP as following:
GDP = C + I + G + (X – M)
With: G: Household Consumption
I: Investment
G: Government Expenditure
X – M: Net exports (X: export; M: Import)
Actually, GDP plays an extremely important part in every economy with some certain contributions. Most countries use GDP to measure standard of living. Economists, policymakers, international development agencies and even the media use it as an indicator of the economic health of a nation. The advantages offered by GDP is that it is widely and frequently used and its data requirements are readily available. Use of GDP spread globally in 1944, which led to the creation of the World Bank and International Monetary Fund. Those institutions adopted GDP method from the United States and Great Britain to guide policymaking on international monetary exchanges and determine which global development projects merited funding. Today, because of its world-wide popularity, GDP is considered as
Essay:
One of the most controversial economic issues today is the role of Gross Domestic Product (GDP) and Human Development Index (HDI) in a country’s economy. There is a question about a particular aspect of the macro economy and societal well-being:
Some people believe that Gross Domestic Product (GDP) is an inadequate measure of societal well-being and should be replaced by the Human Development Index (HDI).
The following essay is to present our opinion about this ideal.
First of all, GDP is commonly defined as the market value of all the final goods and services produced in an economy within a period of time.
Though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments, exports and imports as well that occur within a defined territory. We have formula of GDP as following:
GDP = C + I + G + (X – M)
With: G: Household Consumption
I: Investment
G: Government Expenditure
X – M: Net exports (X: export; M: Import)
Actually, GDP plays an extremely important part in every economy with some certain contributions. Most countries use GDP to measure standard of living. Economists, policymakers, international development agencies and even the media use it as an indicator of the economic health of a nation. The advantages offered by GDP is that it is widely and frequently used and its data requirements are readily available. Use of GDP spread globally in 1944, which led to the creation of the World Bank and International Monetary Fund. Those institutions adopted GDP method from the United States and Great Britain to guide policymaking on international monetary exchanges and determine which global development projects merited funding. Today, because of its world-wide popularity, GDP is considered as
References: 1. Nation Master.com, 2011, Economy Statistic > GDP (most recent) by country, viewed October 2012 <http://www.nationmaster.com/graph/eco_gdp-economy-gdp> 2. Human Development report, 2011, Components of Human Development Index, viewed October 2012 <http://hdr.undp.org/en/statistics/hdi/> 3. Gustav Ranis, 2004, Human Development and Economics Growth, Yale university, New Heaven, US, viewed October 2012 <http://www.econ.yale.edu/~egcenter/publications.html> <http://www.econ.yale.edu/growth_pdf/cdp887.pdf> 4. Royal Wolverson, 2010, GDP and economic policy, Council on foreign relations, viewed October 2012 <http://www.cfr.org/economics/gdp-economic-policy/p22922>