...COMPARE AND CONTRAST THE MEASURES OF DEVELOPMENT WHICH ARE GDP, GNP, AND HDI? Firstly define the three key measures of development which are GDP, GNP, and HDI? Then I will compare and contrast the two economic approaches (GDP/GNP) and then compare and contrast these two to the human development approach (HDI) DEFINATIONS: GDP- The monitory value of goods and services produced by residents of a country (both citizens & non-citizens) in a given period of time usually a year. GDP can either be Real or Nominal GDP. GNP- This is the monitory value of goods and services produced by citizens of a country in a given period of time usually a year. GNP can either be Real or nominal. HDI-Since 1990 the UNDP has been publishing an annual report called the Human development report & the centre core of this report is the human development report (HDI). The HDI ranks countries according to their level of human development. It is for this reason therefore that the HDI focuses on three main variables & these include. Per capital income, life expectancy & educational attainment. SIMILARITIES 1. Both represent an attempt to measure the total economic output of a nation during a given period (usually one year) in sense they both measure development from an economic perspective 2. It measures both the size and direction of economic activity (growth, stagnation or contraction) – expansions and recessions are based on changes in GDP 3. Shows the relative strength of the...
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...Assignment On Relationship between GDP & HDI Submitted ToCourse Instructor Of B-University of DhakaDepartment of Banking | Submitted ByMd. Yasir ArafatId No. 62B.B.A 13th BatchDepartment of BankingUniversity of Dhaka | Date of Submission08.o7.09 | Introduction to GDP A region's gross domestic product, or GDP, is one of the ways of measuring the size of its economy. The GDP of a country is defined as the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year). It is also considered the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time. Components of GDP Each of the variables C (Consumption), I (Investment), G (Government spending) and X − M (Net Exports) (where GDP = C + I + G + (X − M) as above) C (Consumption) is private consumption in the economy. This includes most personal expenditures of households such as food, rent, medical expenses and so on but does not include new housing. I (Investment) is defined as investments by business or households in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households (not government) on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases of financial...
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...Product (GDP for short) has been used as a method of evaluating the human well-being for a long time all over the world. But with the introduction of Human Development Report in 1990, the Human Development Index (HDI) has attracted great attention of policy and academic circles, as well as broader community around the world. This appearance also helps raising the question: Is GDP still an adequate measure of societal well-being and should it be replaced by HDI? This question has attracted a lot of people and cause a controversy among them. So let’s have a look at that matter of argument. As you know the standard well-being varies from time to time, from place to place so we should at first understand: What is well-being? In general, well-being is the pursuit and fulfillment of personal aspirations and the development and exercise of human capabilities, within a context of mutual recognition, equality and interdependence. To make it more detailed here are some key criteria that we should include to valuate well-being: Material living standards (income, consumption and wealth); Health; Education; Personal activities including work; Political voice and governance; Social connections and relationships; Environment (present and future conditions); and Insecurity, of an economic as well as a physical nature. That is the overview of well-being. What about the effectiveness of GDP in measuring societal well-being? To answer this question we should have a quick look at: How GDP covers...
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...8/9/13 [Economy Q] Why use GDP (nominal) instead of GDP (PPP) when comparing two nations? « Mrunal HOME ECONOMY MAY 30TH, 2012 2 COMMENTS [Economy Q] Why use GDP (nominal) instead of GDP (PPP) when comparing two nations? After the previous question regarding GDP (at purchasing power parity) between Japan and China, Tarun asked, i have a query why GDP (ppp) is not used often to measure worth of countries as it give real picture than using GDP (Nominal terms) Answer For example: In India majority of people are poor, and receive subsidized grains (like 1 kilo rice for 3 Rs, kerosene etc. from PDS shops. In America poor people are supported by Government by food stamps and social security cheques. Now comparing two nations, GDP (PPP) wise, Obviously majority of Indians are poor, and majority of them get cheap- subsidized stuff, the purchasing power parity of India may look better than Americans. But does it really mean India is financially more powerful than America just because Indians can buy more stuff in local market compared to Americans? No, because financial activity is not limited to local market. We’ve to import crude oil from Middle east and buy jet-planes, missiles from Russia,France and Israel. We’ve buy pulses and onions from Africa and Pakistan(!), Those people are not going to sell us stuff with subsidy in Rupees, like we get in our local market. They’ll ask hard dollars (or gold or diamonds) as payment. So there, in international market, America...
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...Development may be associated with structural transformation from a primary good based production to manufacturing and service base economy. It may also be associated with social aspects such as poverty, employment state and equality. Commonly, countries tend to measure economic development to determine the overall development. The scope of economic development includes the process and policies by which a nation improves the economic, political, and social well-being of its people. 1 The measurements commonly used by countries are notably Gross Domestic Product (GDP) and Gross National Product/Income. Other measurements include, but are not limited to; the Human Development Index, Happiness Index, UN agencies' inclusive wealth...
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...Growth and Development 2 3. Human Development Index 3 3.1 Historical Background of Human Development Measurement 4 3.2 Definition of Human Development and HDI 5 3.3 HDI Calculation 6 3.4 HDI Interpretation and Application 7 3.5 Limitations 8 3.6 Criticism 9 4. Conclusion 10 Appendix-I (Acronyms and abbreviations) 10 References 11 1. Introduction Over the last two decades economic growth has got a lot more attention among policymakers, corporate, economists, and academics in India and across the world. Since 1991, when India implemented liberalization, privatization, and globalization policies, GDP growth rate has become a buzz word. It has got disproportionate amount of attention from policymakers and economists. It has been used excessively to measure the success or failure of any policy. But after two decades it has become clearly visible that GDP growth rate alone cannot measure the development of a nation. The difference between growth and development too has become clearer. In spite of fast paced economic growth for last 10-20 years, a large part of our population remains illiterate. A large part of our population does not have the access to safe drinking water and proper medical care. Highest number of malnourished children belongs to our nation. These are some of the bitter realities which GDP growth based measurement never reflects. All these facts suggest the need of a more holistic approach to measure the development and growth...
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...Q. How is GDP measured and what are its limitations as a measure of the quality of life? A. Gross Domestic Product (GDP) can be defined as the annual value of output produced by factors of production within a nation’s border. In other words, it is the sum of all incomes earned by the country’s residents when producing goods and services with resources located inside that country. GDP is not to be confused with Gross National Product (GNP), which measures the flow of output produced with resources, which are owned by the nation wherever they might be located. The difference between GDP and GNP is net property income from abroad. The word “gross” in both of these measures of national income, indicates that no account has been taken of depreciation. There are 3 methods of calculating GDP: the product/output method, the income method and the expenditure method. In theory, because they all claim to measure the same aggregate, they should all give the same total. This is shown below in the circular flow of income: However, in practice, this is unlikely to be the case. This is because extremely large sums arising out of millions of transactions paid over different time periods are being dealt with and it would therefore be very unlikely if all 3 measures coincided. The first way of measuring GDP is to add up annually all the value of the goods and services produced in the country, industry by industry. This is known as the output or product...
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...world’s largest producer of raw material such as tin and rubber to being a diversified economy to reduce the dependence of exported goods. As a result, Malaysia GDP is now driven mainly by the services and manufacturing sectors (Malaysia Factbook 2014). 2.0 Malaysia Economic Growth Rate Table of Malaysia GDP Growth (Annual %) from year 2003-2012 Year | GDP Growth (Annual %) | 2003 | 6 | 2004 | 7 | 2005 | 5 | 2006 | 6 | 2007 | 6 | 2008 | 5 | 2009 | -2 | 2010 | 7 | 2011 | 5 | 2012 | 6 | Sources: The World Bank Group 2014a Line chart of Malaysia GDP Growth (Annual %) from year 2003-2012 Sources: The World Bank Group 2014a The x-axis of the line chart above represents years from 2003 to 2012 while y-axis represents Malaysia’s GDP Annual Growth Rate. GDP Growth (Annual %) can be defined as annual percentage growth rate of GDP at market prices based on constant local currency (Index Mundi 2014a). According to the line chart, GDP Annual Growth Rate in Malaysia is at average of 5.1 percent from year 2003 to year 2012 and it was growing above 5 percent with the exception of year 2009. The Annual Growth Rate hit record lows of -2 percent in year 2009 and reached an all time high of 7 percent in year 2004 and 2010 (The World Bank Group 2014a). One of the reasons that contribute to the growth of GDP in year 2004 is the growth of private investment, implying...
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...just southeast of Australia, New Zealand has some major competition with the production and exportation of their goods. They are also very reliant on foreign imports. Because of the major country of Australia just to their north, they also lose many members of their population to immigration. But on a whole, how does their economy hold up in comparison to the rest of the world? New Zealand is a power parity and has a gross domestic product (GDP) of $63.8 billion. The Organization for Economic Co-Operation and Development (OECD) has shown a steady increase in the GDP of New Zealand since 2004. However they still fall below the OECD average. (New Zealand Institute, 2010) There will be an increase in GDP for New Zealand in 2010 because of the earthquake that took place in September. The increase is estimated to be about $4 million dollars to replace and repair the damage that was done during the earthquake. This is a great example of paying attention what has taken place within a country over the last year when reviewing the GDP....
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... b. literacy c. average GDP Despite gains it has made on the economic front, the Philippines remained at 114th globally for the 5th straight year in the Human Development Index (HDI) released by the United Nations Development Program (UNDP) on Friday, March 15. The HDI is a key indicator of citizens' state of health, education, and income, among others. In the 2013 Human Development Report titled "The Rise of the South: Human Progress in a Diverse World," the UNDP said the Philippines' HDI score has been improving in the past 30 years. But its score -- 0.654 -- is still slightly below the East Asia and the Pacific regional average of 0.683. (A total of 186 countries were covered by the UNDP study.) Some data on the Philippines from the 2013 HDR include the following: * The life expectancy of Filipinos is 69 years old. * The mean years of schooling in the Philippines is 8.9 years while the expected years of schooling is 11.7 years. * The country's Gross National Income per capita level is $3,752 (computed using 2005 purchasing power parity) * The country ranked 77th overall in the Gender Inequality Index, the third lowest rank in the ASEAN. * Around 18.4% of the population lived below $1.25 in the 2011-2012 period. * Some 9.1% of the population is vulnerable to poverty while 5.7% are living in severe poverty. * Debt servicing was the highest public sector expense and accounts for 6.5% of Gross Domestic Product (GDP) in 2009. * The country's...
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...Many study in the past just considered region as an isolated “island”, and the mutual relations among different regions were usually ignored. However, regional economy is an open system. Factors such as trade, factor mobility (labor or capital), and technology or knowledge spillover will all make relations among regions become complicated. Under such circumstance, regional economy is no longer isolated but strongly related. The development of regional economy not only relies on its own endowment, also highly depends on the development of other regions This paper is going to bring relative spatial autocorrelation analysis and econometrics methods in the analysis of regional economic growth in China. It attempts to test the spatial dependence of economic growth among different provinces in China and its tendency. The inner mechanism of regional economic growth will also be discussed. In the second section, I will briefly introduce the literature review about regional economic study in China. In the third section, using a sample of per capita GDP data over 1978-2008 in 31 provinces in mainland China, I compute a global spatial autocorrelation, and use the local spatial autocorrelation to get general idea where this global spatial autocorrelation come from. In the fourth part, the spatial factors which influence regional economic growth will be tested. Conclusion will be included in the last section. 2. Literature review In China, the study of regional economic growth...
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...Development is a process in which things are changed or made better in an attempt to improve the overall environment. GDP is an indicator of development used by many people. The advantages of using GDP are that it gives one single clear figure, which is easily presentable. The fact it is a single figure also makes is very easily comparable when measuring countries against each other. Disadvantages of using GDP as a measure of development include, the fact that GDP does not take disparity in incomes between the rich and poor into account, therefore you could have the richest 1% of a population earning 99% of the wealth and GDP would not show this. GDP does not measure the sustainability of growth, for example, a country may achieve a temporarily high GDP by over-exploiting natural resources or by misallocating investment. HDI is another indicator of development. There is widespread use of HDI to compare development levels and it does reveal clear global patterns. Advantages are things such as, it does not solely concentrate on economic development, and takes into consideration that there are other, more social, ways to measure human development. It shows that an increase in education and health shows can see improvement in a countries infrastructure. The success of government policy can also be seen because if education and health levels are high the policies are likely to be working. Disadvantages could be, data from some developing countries may not be very reliable and may...
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...Indicators of economic development The intention of this document is to make the reader understand the concepts of economic indicators. The writer shall therefore briefly discuss indicators such as Gross National Product (GDP), Gross Domestic Product (GDP), Human Development Index (HDI) Gross National Income (GNI), and Infant Mortality Rate. The term National Development is somewhat comprehensive, Aggarwal(2004). It has basically been defined as all aspects of an individual and the nation, cultural, democratic, emotional (social order), economic, intellectual (education material) ,moral, physical, spiritual and social. Regan (2006) looked at development as human progress and quality of life. It’s important to point out that there may not be a single definition of development. Modern scholars have suggested the need for just a working definition and so propounded that development be viewed as a positive change in countries and communities. It (development) is therefore connected with social, economic and political advancement of people, Cornwell et al (2012). There is also need to understand the concept of indicators. Cornwell et al (2010) explained that economic development indicators help to explain or illustrate development levels at any given country. These indicators have helped in the categorisation of countries as being poor, medium or rich-hence the idea of first world, second world and third world. Regan 2004 also pointed out that indicators are seen as measurement...
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...GDP vs. HDI- the adequate measure of societal well-being Introduction “We need a new economic paradigm that recognizes the parity between the three pillars of sustainable development. Social, economic and environmental well-being are indivisible. Together they define gross global happiness,” said the Secretary-General Ban Ki-moon in the high-level meeting – “Happiness and Well-being: Defining a New Economic Paradigm” at UN Headquarters in New York on the 2sd, April, 2012. These words remind us of the fact that not just economic well-being but social well-being (as much as enviromental well-being) is also an essential factor in rating a nation’s happiness, as well as that of a man. Therefore, the important thing to do now is to find a way to measure social well–being, and should that be Gross Domestic Product (as some country has done)? However, in actual fact, there are people who believe that GDP is inadequate and it should be replaced by the Human Development Index (HDI). We find this opinion very convincing. The United States Institue of Peace (USIP) defined “social well-being” as “an end state in which basic human needs are met and people are able to coexist peacefully in communities with opportunities for advancement.” But what is an “end state”? And we can base on which factors to evaluate it? To answer these questions, the USIP also pointed out the 4 neccesery conditions to achive this “end state”, which were: Access To and Delivery of Basic Needs Services, Access...
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...by two major fiscal crises in Greece: the 1989-1993 crisis, and the ongoing crisis. In both crises deficits exceeded 15,0% of GDP. In between, Greece entered the Economic and Monetary Union and adopted the Euro To facilitate discussion the 20 year period will be divided into two parts: the 1989-1999 period, and the 2000-2009 period. 2 1989-1999: securing EMU membership The 1989-1993 sub-period: Macroeconomic developments Weak economic activity (1.2% average growth) Very high inflation (16.8% annual average) Very high real and nominal interest rates Low fixed investment (1.5% annual average) Fiscal developments Very high general government deficits (13.6% of GDP average) The 1990 deficit reached 15.9% of GDP Primary deficit averaged 4.3% of GDP Fast accumulation of debt Debt ratio increased from 69.0% of GDP in 1989 to 110.1% of GDP in 1993 Other reasons for debt accumulation Very high interest payments From 6.8% of GDP in 1989 to 11.4% of GDP in 1993 3 TABLE 1 Selected Macroeconomic Indicators (annual average rate) 1989-1993 Real GDP growth Fixed investment growth Inflation (CPI) General Government deficit (% of GDP) Primary Deficit (-) or Surplus (+) (% of GDP) Total general government expenditure (% of GDP) Total general government revenue (% of GDP) General Government debt (% of GDP) Current Account deficit (% of GDP) 1,2 1,5 16,8 -13,6 -4,3 48,7 35,1 73,7 -2,6 1994-1999 2,8 6,1 6,8 -7,0 4,0 48,7 41,5 109,0 -3,0 -5,2 0,6 45,5 40,3 101,0 2000-2004...
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