Gdp Economics

Only available on StudyMode
  • Download(s) : 491
  • Published : July 31, 2011
Open Document
Text Preview
Gross Domestic Product (GDP), since its introduction during World War II as a measure of wartime production capacity, has become the nation's foremost indicator of economic progress. It is currently widely used by policymakers, economists, and the media as the primary scorecard of a nation's economic health and well-being. However, GDP was never intended for this role. It is merely a gross tally of products and services bought and sold, with no distinctions between transactions that add to well-being, and those that diminish it. Therefore, in the case of if a nuclear power plant disaster occurs, it will be seen to be good for GDP due to large-scale reconstruction, but it is certainly not good for individuals as destruction has taken its toll. Thus, if one measures the economic performance and well-being from the lens of GDP in this situation, it is unlikely that he can get the accurate result due to the limitation of the GDP, which in turn implies that GDP could be a ‘false beacon’. In this paper, we shall examine the reasons.

Firstly, those who think that explosion of nuclear plants is good for the economy will have fallen into the broken-window fallacy; if a kid hits a baseball through a window, it creates a job for the repairman. It sounds superficially appealing as new employment has been added and GDP rises. However, it is clearly a fallacy. It is the same situation with the aftermath of nuclear power plants disaster. As destructions such as severely damaged roads, highways, commercial buildings, houses, and other infrastructure take place, construction will be a boom industry instantly. This will by all means creates millions of jobs and thus boost GDP. Better still, the workers will spend their wages and stimulate the rest of the economy, too. The country will be better off for having endured such a disaster. If this were really the case, then the best possible way to a country economy would be to level the entire country. Every building should be...
tracking img