Are GDP and GNP good measures of economic welfare?

Answer 1

GDP and GNP are very good measures of ECONOMIC welfare since they are the sum total of all the money a country makes. But using GDP for comparisons is useless because America is going to have a higher GDP than Luxembourg because the population of the USA is hundreds of times larger.

GDP per capita is the GDP divided by the total population, this tells you the average wealth created for each person in the country. And when this indicator is used you can tell which country is more economically developed. Luxembourg has a much higher GDP per capita than the USA.

As far as measuring the quality of life in a country, the GDP per capita is quite good, because if the country is rich, then high quality education, sanitation and health care will be able to be afforded. But there is not a direct correlation with this.

The UNs 'Human Development Index' combines wealth, education and health care to give a more rounded picture of the most developed country.

According to the 2005 report, Norway is the most developed country (with an egalitarian political philosophy) and Niger is the worst.

Answer 2

Actually GDP and GNP are not a good measures in the sense that it only measure the goods and services that are produced in the country which are recorded, however, in all country there are what we called Black market loads of goods and services are produced without being really recorded therefore the value of these are not known. Similarly, GNP doesnot give a fair value as it fails to take account money transfered through black market.
Subsequently, GDP and GNP can be used to get an average measure of a countrys' economic welfare.
Discussion are open to whoever have a diferrent opinion.

Answer 3

Not really. They are based on National Income statistics and do not indicate standards of living. Take as examples small countries like Luxembourg with high GDP and a small population. GDP per capita is therefore high but the standard of living is the same as in France and Germany with lower per capita GDPs. Better measures of economic welfare would be the number of private cars, televisions and PCs per head. Along with that, look at average wages per head. Countries like Peru have quite good GDP but average income per head is very low.

Answer 4

There is always a critical mind but so far so good, served well.

Answer 5

In addition to other indices