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

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

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 ( , 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 (, 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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