Alternative Indicators to GDP as A Mean to Measure Development



Abstract

The paper discuss about the alternative indicator of GDP that can be used to measure other variables effectively. It is a fact that after more than sixty years of predominant role played by GDP in western countries, both the core measures and its objective of economic growth have been questioned. It is not seen as a consistent factor to maintain growth as a societal goal for keeping GDP as the major reference for the socioeconomic policies. Various alternative indicators have been suggested in this paper. However it highlights its advantages and disadvantages for each of the indicator introduced. Thus our analysis on the indicators also suggested that Adjusted Net Saving (ANS) has attempted to illustrate the norms underpinnings, particularly obscured by technical concerns around the numbers.

Alternative Indicators to GDP as A Mean to Measure Development

Introduction

In economics, an indicator is a statistic constructed to measure certain dimensions of economic activity, this as objectively as possible. Their changes and their correlations with other variables are frequently analyzed using methods of econometric.

The indicators are constructed by the aggregation of evidence contained in a document called a "dashboard ". The construction of indicators derived from a variety of agreements that reflect more or less certain priorities and values ??ethical and moral. The "Tableau Economique" of Francois Quesnay, leading physiocrats who lived in the eighteenth century, is one of the first examples of such an indicator to measure the wealth of a country. Since the development of national accounts after the Second World War, the gross domestic product (GDP) and gross national product (GNP) are the most common indicators (Hartwick, 2011).

Discussion and Analysis

Before starting up the topic, it is necessary to discuss about the other indicators and its functions.

The Most Widely Used Indicators

Among the many economic indicators are often used in the first place the Gross Domestic Product (GDP), which is monitored the growth rate to measure economic growth, and gross national product that compares the economies of different nations. Are also often used the rate of inflation and indices of level of income, that of the rich, or the minimum wage, the average wage and the Gini index, which provide glimpses of the distribution and of income inequality. Many financial indicators are finally to use more and more common with the rise of financial globalization.

Criticism on GDP

GDP is perhaps an indicator more imperfect. It is criticized because it is insufficient to estimate the wealth; the gross domestic product was challenged by indicators measuring the quality of life or the environment taking into account.

GDP adds up all that can be measured in monetary terms, ie the gross value of goods and services produced on national soil in a quarter, and the cost of government services. Its major flaw is not to tell the difference between a nuisance and wealth.

According to Dasgupta, it is also being stated that GDP will "mount", and thus create "growth", in case of attack or massive ...