Essay on "Economic Situation"
Essay 3 pages (1030 words) Sources: 1
[EXCERPT] . . . .
Economic SituationCobb, Halstead and Rowe outline a system of economic measurement called the Genuine Progress Indicator (GPI). They argue that the traditional measure of GDP is not an accurate reflection of genuine progress as a society. The GDP measures the value of transactions, but Cobb et al. argue that GDP does not include value judgment. In other words, by focusing on the GDP society and the politicians place emphasis on generating transactions rather than on generating that which is valuable to society. The GPI is essentially an adjustment of GDP to factor in activities that are counted in the GDP calculation but are do not contribute to the betterment of society; and does count those activities that are not counted in GDP but do contribute to the betterment of society. To examine the economic performance over the past eight years we will consider the GDP and then make adjustments to fit the GPI. We will then analyze the merits of the different systems as a means of measuring economic progress.
The GDP has grown in the past eight years. The pace of growth is higher than that of other developed nations, but was lower than in the previous eight years. This is because of two key shocks to the economic system. One was the bursting of the dot-com bubble, which was followed quickly by 9/11. The other is the emerging subprime crisis. These two events have suppressed GDP growth recently, but the economy has still grown.
The first adjustment that we shall make to the GDP for GPI purposes is to consider wealth transfer. The GDP has grown because of an increase in the value of our transactions. However, the net result of those transactions can be found in
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Contributing to this is the increase in consumer debt. Consumers were already increasing their debt in the 1990s and that trend has continued in the past eight years. Consumer debt is included in the GDP not just in terms of the sales that are recorded, but in the interest recorded by the financial services industry. In GDP terms, interest represents wealth creation. Yet GPI argues that the true value of a country is not in paper wealth but in resources. Therefore, the GPI decreases as consumer debt increases. Eventually it is conceivable that consumer debt will contribute to a decrease in the… READ MORE
Quoted Instructions for "Economic Situation" Assignment:
Based on the article *****If the GDP is up, why is America down?***** Atlantic Monthly (http://www.theatlantic.com/politics/ecbig/gdp.htm) and what you have learned in class, evaluate the economic performance over the past 8 years.
Essay should be 2-3 pages long, single spaced, 12 point font, with 1 inch margins.
How to Reference "Economic Situation" Essay in a Bibliography
“Economic Situation.” A1-TermPaper.com, 2008, https://www.a1-termpaper.com/topics/essay/economic-situation-cobb-halstead/64179. Accessed 5 Oct 2024.
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