Read the NYTimes/Neil Irwin article, Can\'t Eat GDP, The article is available in

Question

Read the NYTimes/Neil Irwin article, Can't Eat GDP, The article is available in "Articles" on the Blackboard menu.

Reflect on and respond to the following:
a) Is GDP the best overall measure of the nation's well-being? Why/Why not? Is there a better alternative?
b) What is being measured by the GDP ? What is not measured? How does this relate to the "median household income"
c) The author implies/asserts that, because inflation adjusted median household incomes have stagnated, the U.S. economy is failing a majority of Americans...Do you agree/disagree? Either way, can you reconcile this trend with the broader GDP data that show significant growth/recovery in output as well as gains in productivity?

Explanation / Answer

Ans

1 No it is not since it reflects only production of goods and not their composition, distribution etc. It does not take into account other socio economic factors like freedom, longitivity etc. Yes there are better alternatives like Hdi

2 it measures amount of goods and services produced by economy in a year without double counting. Longitivity, educational achievements, heath status, composition of output and its distribution are not measured by gdp. Median households income depends on population and income distribution also. They are not taken into account by this measure  

C yes we do agree. It can be reconciled in the sense that gains have been cornered by upper class capitalist minority

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