GDP: A Country's Key Progress Determinant?

The “health” of the economy is a constantly debated topic of economics with the modern accentuation of more global economies, the recognition of the business cycle, and alternative indicators to measure the vitality of countries and other regions. The GDP,(gross domestic product), of an economy is one of the most essential determinants of a country or region’s progress, collectively quantifying the aggregate value of all goods and services produced in an economy. The term is used to determine the growth of the economy from a monthly basis or through a collective view over a year or ten years.

While it is questioned by the author if a country can estimate the welfare of their country strictly off of the increase or decrease of production, the GDP does have a decent measurement of what we can consume beget of what we can produce.

While the short run of the GDP of a country may differ in consumption, the long run of the GDP allows the production and consumption to become balanced with the awareness of these components of the economy, Real GDP is the number that is adjusted to account for inflation, and in contrast, the nominal GDP has not been adjusted for inflation which is significant to determining if you have really produced more of anything, Another merit of GDP is GDP per capita which measures a nation‘s GDP divided by its population.

The author’s example of determining which country is richer and how most would consider India to be presumably the richest country over Israel.

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Unfortunately while the GDP in India is the greatest, the GDP per capita is poorly efficient with only $2,900 compared to $28,300 in Israel showing the population isn’t growing faster than the production.

India also showed that GDP per capita can show the negative effects of having a low GDP per capita with the epidemic of leprosy and how there is a disadvantage to the citizens and the government because of the potential cure for the disease that can’t be attempted because of the lack of production to benefit the total population Other merits that I found of GDP is that as Americans, GDP has shown that we have produced more and essentially used our time more effectively with the twenty four hours in a day that hasn‘t changed The takeaways of GDP is especially extensive with the inquiring of economists if GDP is sufficient in measuring the social progress of a nation. Alleviating the economic activities that are not paid for or environmental degradation, economists are puzzled by how GDP takes the actions into account that are sometimes just as important as materialistic or tangible services measurement, GDP also doesn’t take into account the distribution of income, along with GDP per capita simple numbers highlighting massive disparities between the rich and poori.

The most intriguing disadvantage of GDP collectively though is the flawed quantifying of how well off we consider our countries and even ourselves to be and not really considering what makes us happy. Even though with the turn of century and others depriving self- happiness for the socially acceptable ambition towards success, economists are just starting to fathom that maybe there should be other capacities for determining the overall well-being of ourselves and our country An alternative measure of economic progress talked about in chapter nine was the proposed “social report card” by Fordham’s Marc Mirinighoffi The index would combine sixteen social determinants such as health care, affordable housing, child poverty, crime and other indicators, One of the challenges in the development of these alternative tactics is people’s definition of progress varies, especially with the intermingling of political preferences such as conservative and liberali GDP only accounts for the numbers of these measurements, and seemingly with just a slight decrease or increase in these numbers account for determining the damage or optimism of a nation and its citizens.

Unfortunately, many people won’t pay attention to differences in crime rates or affordable housing if they have no interest or interaction with these metrics based off of just single numbers for each Another challenge is the government’s influence on fiscal and monetary policies. While both are to encourage consumers and businesses to spend or invest money, the alternative measure really culminates more of a social approval for the progress of a country. In conclusion, poverty and demographics are two indicators that should be considered along with GDP for the overall health of a country. With the varied opinion of what is considered to be the necessary income of individuals to buy the basic supplies of life, (poverty line), there should not be a country to be considered progressing or healthy with roughly one in five American children to be poor and 35% nearly black children.

As the statistical onset to what should be intuitively acceptable, GDP takes into account only what we produce and not those who are produce but still have an unacceptable living wage. The other indicator that should be accounted for in determining the health of a country is demographics, Along with the population becoming older, we also must consider the fact that social security and Medicare are also suffering with more Americans living longer and having less children. The healthier economy should be able to have a successful program to have current workers’ wage raise in order to still have an equitable amount of money left over to encourage investing and spending, while also providing seniors at better wage to acquaint the modulation in demographics.