Dear Profs, apart from GDP what other proxy can be used to measure economic growth with authority and define the data source?
https://python.quantecon.org/von_neumann_model.html
https://www.albany.edu/~bd445/Economics_301_Intermediate_Macroeconomics_Slides_Spring_2014/Solow_Growth_Model.pdf
https://www.investopedia.com/terms/g/gpi.asp#:~:text=GPI%20is%20an%20alternative%20metric,the%20health%20of%20a%20nation.
While the last source is practically interesting, the Jv Neumann growth model and the Solow model carry important theoretical impacts as per formal maths.
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Monetary policy David Adesina Babajide needs also to be observed; the strategic economic victory of the full fiat monetary system, with 0 and - interest rates, since the last 3 decades, has not made the Jv Neumann interest and growth formula obsolete, but it will be difficult 😂 for you to find it in modern textbooks of economics.
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Some economic history of the GDP:
In 1989, the official GDP of the Soviet Union was $2,500 billion. while the GDP of the United States was $4,862 billion, with per capita income figures as $8,700 and $19,800 respectively.
The USSR was the first major non-Western country to close the developmental gap that had existed with the West since the 16th century.
https://documents1.worldbank.org/curated/en/187491468769887526/pdf/multi-page.pdf
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I'm pleased that some economists and sociologists are beginning to talk about, for example, alternative measures of human well-being - alternative, that is, to GDP, on which the world runs.
John Sulston
As Robert Kennedy put it in his famous election speech in 1968 : it [GDP] measures everything in short, except that which makes life worthwhile.
According to the Central Statistics Office (CSO):
Gross Domestic Product: How it is Measured
1. The Output Method (all value added by each producer),
2. The Income Method (all income generated), and
3. The Expenditure Method (all spending).
All within an economy of interest.
- Output Method
The Output Method measures GDP as the value of
Output (what is produced)
minus the value of goods and services used up in producing these outputs (the inputs or Intermediate Consumption)
plus all Taxes on Products like VAT
minus all Subsidies on Products like renewable energy subsidies
- Income Method
The income method measures GDP by adding together:
The Gross Profit of companies and the Self-Employed,
plus the wages of employees (Compensation of Employees).
plus all Taxes on Products like VAT
minus all ( like renewable energy subsidies.
- Expenditure Method
In the expenditure approach, as the name implies, we measure how much is spent on goods and services. It is important that spending is only counted once. We estimate:
Consumer spending by individuals (Personal Consumption Expenditure)
plus Net Expenditure by Central and Local Government
plus all Capital Spending (such as buildings and machines)
plus Exports, since exports contribute to Ireland's GDP because it is spending by other countries on Irish produced goods and services
minus Imports because this total is spending on the outputs of other countries.
The three approaches should theoretically give the same answer. However, in practice they will always diverge to some extent as they are derived from different data sources. This is the experience in all countries. Countries resolve the problem in various ways. In some countries, the official level of GDP is taken to be the average of the income and expenditure estimates. A balancing item (statistical discrepancy) is also displayed which is half of the difference between the two estimates. This is the amount by which both estimates have to be adjusted to agree with the official level of GDP. The statistical discrepancy is just a small component of the total estimate because the source data is analysed in fine detail to resolve as many inconsistencies as possible.
Productivity growth is the obvious measure as it is the main way to raise incomes and living standards.
You can also use.
- Gross National Product (GNP)
- Standard of Living, etc.
- Badges
- Science topic