Opinion on the Usefulness of GDP measurements
The GDP Gross Domestic Product, tells us the sum of all goods and services produced in a country for the year. (Soubbotina) Although it is a useful for many reasons because it helps on a national finance scale to understand a countries economy. It can help determine and establish financial risks, trading risks and other such federal level alliances, as well. It is helpful for national development, disbursement of services, national encouragement of skilled training and education in fields with the promise of longevity it is not a miracle measure and does not define or snap shot the development of the country, only its potential for future development. It is a very useful tool for many reasons. This may be why it has been over praised (and over criticized) and paired with far too many words outside it’s field of relevance. Paul Samuelson Nobel Laureate describes the GDP as “truly among the greatest inventions of the 20th century” which may be repeated more often than his defining phrase “a beacon that helps policy makers steer the economy toward key economic objectives”. (OECD Observer)
If we look at ‘Development” as a word that is being paired with the GDP we can find a slew of problems. Red taping with GDP relevance ultimately slows progress, another ‘big word’. Development is always paired with another word to tell us what kind of development we are discussing: human development, industrialization, energy production or efficiency and so much more. A google search of ‘define development’ brings us to further defining points. Economic, business, what kind of development. Though the GDP can give us clues as to where in the nation we can find funding for programs or workers to train for production the GDP numbers do not answer questions about development.
The array of articles and opinions on the DGP not being important in development terms are perplexing. Many of them are most concerned with outlining why the GDP is a bad criterion to use in regards to individual well beings. Diane Coyle points out in her article that she doesn’t not want “the government dabbling” in her well-being. The main point of her article is that there is a great difficulty in assembling all the vast sets of statistics for an accurate total, which is a valid point. (Coyle) As well as concerns over the accuracy in reporting from the many sectors. The GDP is still useful for what it does “helps policy makers steer the economy toward key economic objectives”. If we are talking about Economic Development of a country, it is a very important and relevant piece of the puzzle. If we are talking about quality of life, GDP helps us to understand what is possible based on monetary investment necessary to develop specific solutions to barriers adverse affecting living standards.
Works Cited
Coyle, Diane. "Has GDP reached its limits as a useful measure ." AEON Essays 06 02 2014. WEB. 20 10 2016. <aeon.co>.
OECD Observer. Is GDP satisfactory measure of growth? n.d. WEB. 18 10 2016. <htp://oecdobserver.org/news/archivestory.ph/aid/1518/ls_GDP_a_satisfactory_measure_of_growth_.html>.
Soubbotina, Tatyana P. "Beyond Ecconomic Growth." WBI Learning Resouces Series n.d.: 7-15.
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Assig. 2 GGY Professor Miller
MCC Fall 120-50