Development is defined as the standard of living of people economic development is supportive and it involves increased per capita income and creation of new opportunities in education, healthcare, employment sectors. In the 1950s and 1960s, development was mainly looked at through an economic lens and a country was developed was based on the standard and output of a country’s economy.
A more overall view began to take place in the 1970s as aspects such as poverty, health and education started to be considered and recognised as social issues that resulted from trying to achieve economic development. This lead to the birth of the measurement of social development and the emergence of social indicators of development. The two categories of economic and social indicators of development facilitate a more wholesome way of analysing and determining development. Each of these indicators has its own importance that helps to classify countries development and their economies which is what this essay will be looking to discuss.
Table of Contents
- Indicator of Development
- Economic Indicators
- Gross Domestic Product (GDP)
- Gross National Product (GNP)
- Purchasing Power Parity (PPP)
- Limitations of Economic Indicators
Objectives and Key Themes
This essay aims to explore the concept of development, focusing on the role of economic indicators in measuring and understanding national progress. It delves into the key categories of economic indicators: Gross Domestic Product (GDP), Gross National Product (GNP), and Purchasing Power Parity (PPP). The essay further examines the limitations of these indicators and highlights the complexities of using them to assess overall development.
- The multifaceted nature of development and its measurement
- The importance of economic indicators in assessing a nation's progress
- The specific characteristics and limitations of GDP, GNP, and PPP
- The challenge of capturing social and environmental costs associated with economic growth
- The significance of wealth distribution and inequality in shaping economic development
Chapter Summaries
- Indicator of Development: This section introduces the concept of development and how it evolved from a purely economic perspective to encompass social and other dimensions. It emphasizes the importance of both economic and social indicators in providing a comprehensive understanding of development.
- Economic Indicators: This section focuses on three key economic indicators: GDP, GNP, and PPP. It describes each indicator's methodology, its use in measuring national economic performance, and its strengths and weaknesses.
- Gross Domestic Product (GDP): This subsection discusses the significance of GDP as a measure of economic output and its role in assessing economic growth and living standards. It also explores the limitations of GDP, including its failure to fully capture social costs and wealth distribution.
- Gross National Product (GNP): This subsection focuses on the relationship between GDP and GNP and highlights their differences. It emphasizes the importance of considering income earned by residents from overseas investment and the income earned by foreign residents within the domestic economy.
- Purchasing Power Parity (PPP): This subsection introduces the concept of purchasing power parity and its use in comparing the value of currencies across different countries. It illustrates the concept with the Big Mac theory, which examines the relative cost of a Big Mac in different countries as a reflection of purchasing power.
- Limitations of Economic Indicators: This section delves into the shortcomings of economic indicators, such as GDP and GNP. It argues that these indicators may not fully reflect the social costs associated with economic growth and may overlook the issue of wealth distribution and inequality.
Keywords
This essay explores the concept of development and its measurement through various economic indicators, including Gross Domestic Product (GDP), Gross National Product (GNP), and Purchasing Power Parity (PPP). It focuses on the strengths and limitations of these indicators in capturing the complexities of national progress, highlighting issues such as social costs, wealth distribution, and inequality.
- Quote paper
- N'kosi Craigwell-Walkes (Author), 2018, Indicators of social and economic Development, Munich, GRIN Verlag, https://www.grin.com/document/418219
