ECONOMICS

Gross National Happiness and Gross Domestic Product



To begin with the task of differentiating Gross Domestics Product (GDP) and Gross National Happiness (GNH), and assessing the challenging that are faced while measuring both, we first discuss and understand both the approaches e.g. GDP and GNH

Gross Domestic Product

Gross domestic product (GDP) means "the value of production of final goods and services made during a certain period of time within a given country. If we exclude the value of GDP from the productive contribution of foreign workers or that firms where ownership (in whole or in part) belong to non-Italian citizens, and include, similarly, the production value that Italian citizens or enterprises wholly or partly owned by Italian citizens, carried out, we get an aggregate different, the GNP (Gross National Product in English, or GNP). The gross domestic income (RIL) can be defined as the sum of compensation of various kinds provided in an economic system during a certain period to the factors of production. Since the GDP is usually calculated by adding the additional values that are formed in different stages of production and because the added value lies in the remuneration of the various types of services (Eric, 2003).

Features of GDP

Magnitude flow

GDP is a quantity called flow, which counts only goods and services produced during the study phase. The meaning or current flow is opposed to the background or stock. The first relates to a period of time (day, week, month, year, etc.) For example, the income of a person is a current or flow because you have to explain the period in which it was obtained. Therefore flows or flows with a clear time dimension. On the opposite side, there are the funds or stocks that lack it, although there is a reference to a point in time. The assets of a person would be an example of variable depth.

Final Production

The GDP measures only final output and not the so-called intermediate production to avoid double counting. When referring to final goods and services is meant that should not be taken into account those goods produced in the period but which have been the raw material for the manufacture of other goods and services. Thus within the final goods and services include those goods produced in a period that by its very nature will not be integrated into any production process, and those other assets that even if by its nature must be integrated into the production process of another product, but by the end of exercise did not have, are known as closing stocks.

Types of GDP

Nominal GDP is the monetary value of all goods and services produced in a country or an economy in current prices in the year in which goods are produced. By studying the evolution of GDP over time, in situations of high inflation, a substantial increase in prices, although production remains constant, can result in a substantial increase in GDP, driven solely by rising ...