Gross Domestic Product Essay

Gross Domestic Product Essay

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Not everything that can be counted counts and not everything that counts can be counted’ a famous quote by Cameron (1963) which is very insightful and interesting. He explains what many in the 21st century are trying to do so as well, and reminds us that there are many things which have more to them than what we count them for in our books. GDP is essentially measuring and counting all of the economic output/input of an economy in terms of money. In this essay I will be addressing the key terms and explaining how GDP is a good measure in some ways, but does not fully reflect the reality of wealth and wellbeing. I will then conclude with what my view is and explain how new measurement tools have come into place with time that hold more importance.
Gross Domestic Product was a theory that was introduced for the President of Roosevelt before the 1930’s as a measurement for the whole economy. But it wasn’t until World War 2 that the GDP became an important measure for Britain to see how well it could to in the war. Initially, the GDP was being used as an emergency tool for measurement of wealth of the economy. Today it has become the key tool to measure and compare growth of economies in the world.
GDP measures the value of economic activity within a country. More precisely, GDP is the sum of the prices of all final goods and services produced in the country during a period of time, normally a year. It measures the legal activities carried out by firms/ individuals and places a monetary value on their work. GDP which was originally GNP- Gross National Product, was used by the creator Simon Kuznets as well was John Maynard Keynes as a tool to help with decisions policy making and planning for war. GDP= C+I+G+(X-M). This formula has now...


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... doi: 10.1080/09538259.2013.807671 [20/11/13].

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• Malthus, T. 1820. Principles of political economy considered with a view to their practical application. London: John Murray, Albermarlestreet.

• Michalos, A. 2010. What did Stiglitz, Sen and Fitoussi get right and what did they get wrong? Social Indicators Research, 102 (1), pp. 117--129. Available from: doi: 10.1007/s11205-010-9734-0 [25/11/13].

• Smith, A. 1910. The wealth of nations. London: J.M. Dent.

• Stiglitz, J., Sen, A. and Fitoussi, J. 2009. Report by the Commission on the Measurement of Economic Performance and Social Progress. [report] Paris: Commission. [Online] Available at: http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf [20/11/13]

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