Question

The Great Stagnation You Can't Feed a Family With G.D.P. SEPT. 16, 2014 Neil Irwin @Neil_Irwin The most important thing to know about the state of the United States economy was revealed in a report Tuesday morning that Wall Street barely noticed. Every year, the Census Bureau delivers a sweeping set of numbers that give the richest annual picture of how much Americans are making, how many are living in poverty, and how many have access to health insurance. The numbers are backward-looking, covering conditions from a year ago. But the new numbers, released Tuesday, in many ways tell us more about how well the economy is servingor failing-the mass of Americans than data that create hyperventilation in the financial markets The census numbers on what American families made last year are as mediocre as they are predictable. We now know that if your household brought in S51,939 in income last year, you were right at the 50th percentile, with half of households doing better and half doing worse. In inflation-adjusted terms, that is up a mere 0.3 percent from 2012. If you're counting, that's an extra $180 in annual real income for a middle-income American family. Don't spend your extra $3.46 a week all in one place

a) Is GDP the best overall measure of the nation's well-being? Why/Why not? Is there a better alternative?
b) What is being measured by the GDP ? What is not measured? How does this relate to the "median household income"
c) The author implies/asserts that, because inflation adjusted median household incomes have stagnated, the U.S. economy is failing a majority of Americans...Do you agree/disagree? Either way, can you reconcile this trend with the broader GDP data that show significant growth/recovery in output as well as gains in productivity?

Answer 1

Ans

No gdp is not best measure of nations welfare because misses many things(see part B) There are better measures like HDI, Hpi, happiness index etc

B it measures the output of goods and services produced in an economy.It does not measure true welfare of citizens e. G Gdp may rise but inequality might increase as most of it accrues to rich people. It does not measure progress in achieving certain desirable outcomes like longitivity, health, freedom, education, etc.median income, HDI, hpi etc measure such things.

C yes I agree with it. Gdp rate has benefited richer people more. Median households have been left behind. E. G while minflation adjusted median incomes have stagnated but gdp growth rate was 3.1 in mid 2017.