Gross Domestic Product (Gdp) Is an Inadequate Measure of Societal Well-Being and Should Be Replaced by the Human Development Index (Hdi)

2746 Words Oct 20th, 2012 11 Pages
Title

Gross Domestic Product (GDP) is an inadequate measure of societal well-being and should be replaced by the Human Development Index (HDI)

Abstract
This paper will discuss the anomally of Human Development Index (HDI) and Gross Domestic Product (GDP). In this discussion I will argue for HDI as a fairer comparison of a country’s overall economic wealth health and social well-being rather than the generally accepted method used by most countries of GDP. HDI allows for a more comprehensive understanding of well-being than purely economic measurements like GDP, and better identifies areas of need within countries. GDP is basicially a measure of a country’s overall economic output. It does not consider GDP per capita. If a country
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Firstly, a country with high GDP but with a large population will lead to in a low GDP per capita. GDP per capita is a measure that results from GDP divided by the size of the nation’s overall population (http://www.differencebetween.net/business/difference-between-gdp-and-gdp-per-capita/ , May, 2011). Thus the indication is not so favorable to discribe the standard of living since each citizen would only get a very small amount when wealth is being evenly distributed. India may have a very high GDP but the standard of living is rather low because of the extremely large population. In contrast, Luxembourg with quite a less impressive GDP will have one of the highest GDP per capita because of its small population. Therefore, a high GDP simply means that a nation has a more efficient economy, but it does not means a high standard of living and it can not measure the well-being of one country (http://www.businessinsider.com/china-inflation-hits-new-high-2011-5, May, 2011).
Furthermore, some people consider that a high GDP could decrease high inflation. However, according to Patrick Chovanec, a professor at Tsinghua University’s School of Economics and Management in Beijing makes a strong argument that high GDP growth is not “good news” that offsets high inflation figures

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