Economic Growth of the Uk and Developing Countries
Discuss two problems of comparing the economic growth of the UK and developing economies using GDP as a measure
One problem with comparing the economics growth of the UK and developing economies using GDP, is that GDP is not an accurate measure of the output of an economy because of the black economy. This means that certain pieces of data are not included in the calculation of GDP, therefore undervaluing the real output. Secondly GDP cannot be an accurate measure of the entire economic growth of a country. Factors such as education and health will contribute to how much an economy is growing, as it improves skills and welfare, of people that may later contribute to the growth of the economy. There is not usually data available to include of these factors, and so GDP is only a measure of the growth of national income.
Furthermore, these developing economies may rapidly change over time and become well-formed economies, and could possibly better that of the UK. Therefore they would not be described as developing economies as a whole, and the comparisons would be a lot different as GDP changes over time, and there are many factors than can speed up or slow it down. Using GDP to measure economic growth may not be the best system, and an alternative way to measure economic growth could be to compare real income over time, or look at how many people go into education for example, to understand standard of living. A better standard of living is most likely to boost economic growth the
One problem with comparing the economics growth of the UK and developing economies using GDP, is that GDP is not an accurate measure of the output of an economy because of the black economy. This means that certain pieces of data are not included in the calculation of GDP, therefore undervaluing the real output. Secondly GDP cannot be an accurate measure of the entire economic growth of a country. Factors such as education and health will contribute to how much an economy is growing, as it improves skills and welfare, of people that may later contribute to the growth of the economy. There is not usually data available to include of these factors, and so GDP is only a measure of the growth of national income.
Furthermore, these developing economies may rapidly change over time and become well-formed economies, and could possibly better that of the UK. Therefore they would not be described as developing economies as a whole, and the comparisons would be a lot different as GDP changes over time, and there are many factors than can speed up or slow it down. Using GDP to measure economic growth may not be the best system, and an alternative way to measure economic growth could be to compare real income over time, or look at how many people go into education for example, to understand standard of living. A better standard of living is most likely to boost economic growth the