Fluent Essays

A 300 word paragraph needs to be written answering the prompt question. The assignment must begin with a thesis. You must identify all relevant concepts, terms and discuss positions against and as well as in favor. In the article attached, they talk about the following Economic indicators: GDP, Unemployment, and Inflation. If you had to select just one indicator to measure the success or health of a country’s economy, what indicator would you select and why? You will need to explain the advantages and limitations of the indicator you selected and contrast it with at least two other economic indicators. This article is available at 5 reading levels at https://newsela.com. Issue Overview: GDP TOP: Map of U.S. states by GDP per capita in U.S. dollars (2012 figures). Courtesy of Wikimedia Commons. BOTTOM: Graphics courtesy of Bloomberg. In the nerds menagerie of economic indicators, gross domestic product is a special attraction. By definition, GDP is simply the market value of all goods and services produced in a given period. By convention, its often used as a measuring stick for a countrys well-being. GDP can move markets, affect elections, shape monetary policy and sway business decisions. It has its critics. Some think it doesnt measure enough, measures too much or measures the wrong things. Some think a single- minded focus on GDP has warped markets and public policy. Others think it does what it does just fine. The Situation GDP numbers influence economic and political debates worldwide. In the U.S., investors are anxiously watching GDP reports for hints about when the Federal Reserve might raise interest rates. In China, the governments preoccupation with GDP may be fueling financial and social instability. In Japan, shrinking GDP has been part of the prime ministers case for economic shock therapy. Politicians tout GDP when things are going well and enlist it when theyre not. Economists often express other data — such as debt and government spending — as a percentage By Timothy Lavin, Bloomberg on 09.21.16 Word Count 617 Level MAX Ed Ed Ed Ed Ed Ed Ed Ed Ed Ed Ed Ed Ed Ed This article is available at 5 reading levels at https://newsela.com. of GDP and budget analysts take it into account when making projections. Questions about the reliability of Chinas GDP reporting have sent investors looking for other measures of economic performance, like steel production and car sales. Indias novel method of calculating growth has left economists bewildered. The Background The English economist William Petty made the first systematic attempt at calculating national income and expenditures using double-entry accounting in 1665. Subsequent theorists from Adam Smith to John Maynard Keynes offered variations. Its modern incarnation dates to the Great Depression, when U.S. presidents struggled to understand how the economy was faring based on inexact measurements such as railroad shipments and the stock market. The economist Simon Kuznets devised a system of national income accounts that was presented to the U.S. Congress in 1937. The first estimate of what was then called gross national product followed in 1942. Most countries now tally GDP using data for consumption, government spending, investment and net exports, governed by United Nations guidelines. In the U.S., the Bureau of Economic Analysis synthesizes about 10,000 data streams to produce its estimate, usually expressed as a rate of growth and always subject to revision. The Argument Critics tend to agree with Robert F. Kennedys memorable line in a 1968 presidential campaign speech that GDP measures everything except that which makes life worthwhile. It doesnt directly assess health, happiness, leisure or equality. In fairness, it was never meant to. Kuznets himself warned that it wouldnt be a great indicator of social progress: A dollar spent building a prison counts the same as a dollar spent building a school. This has led to proposals for alternative measures with names like the Genuine Progress Indicator and Gross National Happiness. Others argue that the single-minded pursuit of GDP growth has led politicians to ignore environmental degradation, encourage financial risk and tolerate widening income inequality. GDP also arguably has technical shortcomings: It doesnt accurately track nonmarket transactions, intangible goods or the informal economy, and while natural resources dont count toward GDP, depleting them does. Much of the digital economy — Google, Facebook, open-source software — is free to use and Ed This article is available at 5 reading levels at https://newsela.com. thus barely shows up in GDP. And the slow pace at which GDP data is compiled is becoming a bigger liability in measuring a fast-changing economy. Many economists would still agree with Paul Samuelson and William Nordhaus — authors of a famous textbook on the topic — who ranked GDP among the great inventions of the 20th century. Whether its suitable to the 21st is perhaps a harder question. Ed Ed