Economics Term Paper Example | Topics and Well Written Essays - 1250 words

Economics - Term Paper Example In their notable works, famous economic thinkers such as Mishan (1967), Scitovsky (1976) and Arrow et al. (1995) have critiqued GDP, arguing that it is a significant mathematical measure, but not a comprehensive measure of the economic activity of a nation (Kitov, n.d.). In the recent past, GDP economic measure has been considered equal to the social welfare of society. It is evident with the recent adoption of the term "standard of living", used synonymously with GDP. However, this relationship is not buoyed by any significant macroeconomic concept, but has become a habit in the recent past. What is conceivably utmost conspicuous is that a huge bulk of reporters and legislators, irrespective of their party-political inclinations, make very credulous declarations about GDP (vintrova, n.d.). It is therefore not astounding then that we see the majority of people in the world prefer economic growth in terms of GDP growth. The same has been supported by an obvious emphasis on GDP growth by global institutions such as the OECD and IMF. Numerous items and events in this life cannot be assessed through GDP, but they are measurable using the cadent of education, health, clean environment, social welfare, freedom and many others. A famous economist started the process of distinguishing the commodities that are comprised in the GDP measure and the capabilities that are omitted from it. His efforts, buoyed by his colleagues efforts led to the notable discoveries of techniques of supplanting GDP. There are various flaws associated with the GDP measure of economic growth. Key among them; it is reported that GDP measures average costs rather than the benefits that emanate from the market operations. It is also said that GDP leaves out many external costs associated with the country’s economic growth. In the years between 1950 and 1965, a negative mean welfare trend was experienced in