What the GDP measures, if anything, has become quite the issue in the digital age. Consider this data:
In 2012, U.S. Real GDP was $15,345.63 billion and Real Per Capita GDP was $48,842 billion.
Five years later, at the end of 2017, U.S. Real GDP was $17,096.18 billion and Real Per Capita GDP was $52,446 billion. (All data was extracted May 20, 2018, from FRED https://fred.stlouisfed.org/.)
Read this blog, GDP: Falling Short, to help you answer this week’s discussion questions.
Reply to these questions in your response:
- Considering the data above, did the U.S. make progress? Explain your answer.
- Given what you know now about economics, should the measure of GDP be changed? Why or why not?
Respond to a classmate:
The Gross Domestic Product (GDP) measures the total value of final goods and services produced in the whole country. GDP has a great effect on the economy, knowing that when the GDP shows a significant growth, it allows firms to hire more workers and therefore produce more so that consumers spend more.
If we consider the GDP measurement, then we can presume that the US did not make a significant progress while the curve is still on the slow rise.
However, given the new facts and depending on many articles, many economists are considering changing the GDP for other methods, because of many reasons, but the one that stood out for me is the fact that GDP measures the bads as well as the goods! Meaning the GDP cannot be reliable to measure the welfare of the population.