Growth is a measure of the welfare of the population of a country or region's economy and the success of economic policies. Implicitly, we assume that high economic growth is beneficial for the welfare of the
population, meaning that high economic growth would be an outcome sought by the political authorities and the population of a country. Although one of the most used measures, has drawbacks that must be taken into account, for example GDP takes no externalities, if GDP growth comes from genuinely productive activities or consumption of natural resources, and there are activities that increase and diminish the welfare or production and are not included in the calculation of GDP, as the informal economy or activities outside of the market, as some cooperative exchanges or production for own consumption. Additionally it may be that economic policies are evaluated using the economic growth in periods of time without regard to intergenerational transfers of resources such as debt or consumption of nonrenewable resources. Economic growth does not take into account what happens to income distribution. This is usually considered a more progressive distribution of income implies a higher welfare. Despite all this, the measure of economic growth is very useful to analyze many aspects of the economy and economic policy.
population, meaning that high economic growth would be an outcome sought by the political authorities and the population of a country. Although one of the most used measures, has drawbacks that must be taken into account, for example GDP takes no externalities, if GDP growth comes from genuinely productive activities or consumption of natural resources, and there are activities that increase and diminish the welfare or production and are not included in the calculation of GDP, as the informal economy or activities outside of the market, as some cooperative exchanges or production for own consumption. Additionally it may be that economic policies are evaluated using the economic growth in periods of time without regard to intergenerational transfers of resources such as debt or consumption of nonrenewable resources. Economic growth does not take into account what happens to income distribution. This is usually considered a more progressive distribution of income implies a higher welfare. Despite all this, the measure of economic growth is very useful to analyze many aspects of the economy and economic policy.
0 comments:
Post a Comment