Gross Domestic Product (GDP): A Meaningful Measure of Well Being?
Gross Domestic Product (GDP) Calculation
(courtesy of Wikipedia)
GDP was first developed by Simon Kuznets for a US Congress report in 1934. After the Bretton Woods conference in 1944, GDP became the main tool for measuring a country’s economic performance and has become a number much loved by governments and the media to summarise ‘how we are doing’.
The generally favoured formula in investment and economic media is
GDP = private consumption + gross investment + government spending + (exports − imports), or
GDP = C + I + G + (X – M)
But does it tell us anything meaningful about the well-being of a country’s economy?
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