August 4, 2014

The Left Side of Economic Growth

down and up

GDP is the measure of economic growth; and sometimes an indicator of development. When a new car is produced, the full value of the car is added to the GDP in the specific period of time. When new computer is produced it is also added in GDP and same examples follow. We are measuring GDP to see the improvement in the welfare of nation.

Yet, the pollution created by vehicles and factories are not included in the calculation of GDP. The traffic caused by over demand for vehicles and exhausted natural resources to produced the vehicle is also not included in the GDP. This is one of the examples and other goods could have the same scenario as well. There are positive scenarios as well, but let's look at this one to think of solutions.

This is not to say that GDP is not a good indicator, like Kaynes said – the world needs light even if it is partial. Yes, an increase in GDP could mean an additional welfare to the nation, yet, over production, over used, over exhaustion has a price to pay – not only money to pay, but may turn back to the welfare of nation.

The solution turns back again the government policies that should be implemented. But this time, I think the solution should be on the public. That is, to think before to consume; to think of the effect of your consumption to the natural resource and to the public as well. To think that to consume means to deplete the natural resources; to consume right amount and not to consume all. To share excess so that nothing is wasted. This is an idea to improve the welfare of nation not only by relying on the government policies, but by starting it in our selves.

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