GDP as a measure of economic growth
The Gross Domestic product has been used as a measure of how wealthy a country and its people are. A growth in GDP has always been seen as a corresponding increase in the wealth of the country. As GDP grows, it can be said that the economy is growing. However, scholars have begun to doubt how true a reflection GDP is in reflecting the progress made by a country. In the technological age, it is expected that productivity has taken a leap (Callen, 2008). This can be attributed to the positive impact of technology which include automation, improved scheduling and increased production. It is expected that with such attributes, economies have grown a great deal. Technology has had a big impact on the economy over the past few years and therefore should e a noticeable impact on the GDP.
The GDP of America has shown marked improvement over the years. Despite the progress shown, the growth is expected to have been bigger than the results seen. With more efficient production, the GDP should have grown by a bigger margin. Therefore, there is an urgent need to change the way economic progress is measured (Callen, 2008). The GDP represents only a shallow reflection of how economies have grown. A slow economic growth in the past decade is not an actual reflection of how the economy has grown, a true measure of economy should be dynamic and takes into consideration current factors that were not in play before. GDP as a measure of economy growth does not give the true picture of its growth.
Callen, T. (2008). What is gross domestic product. Finance & Development, 45(4), 48-49.
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