The GDP number can always indicate whether a country is prosperous or not. Do you agree or disagree with this statement?
Disagree If GDP is always used as a parameter of a country's prosperity.
Gross Domestic Product (GDP) is an index of a country's overall economic output accounting for, among other things, factory output, farmer harvests, retail sales, and construction spending. All these calculations are usually carried out within a certain time span, for example a year. This is a number which then functions to condense the breadth of the national economy into a single data with an unusually large density. The general assumption about GDP is that the bigger the number, the more prosperous the country and its people will be. That's not the case though. For decades, experts have criticized this single measure of the national economy—speaking that it is a misleading measure. Recently, the challenges to GDP have been getting stronger, especially in Europe and countries that are members of the Organization for Economic Cooperation and Development (OECD). According to them, GDP not only fails to reflect the real welfare of society, but also distorts global political goals towards the pursuit of economic growth alone.
Based on research / identification of several limitations of GDP to describe the level of community welfare, such as: (1) When there is a large inequality in society (in terms of income distribution), GDP or other indicators presented per capita (per person) cannot describe the actual condition in public. For example, when 20 (twenty) percent of group members experience an increase in income up to three times what they currently earn, GDP will increase, even though in fact, say, 30 (thirty) percent of group members in the lower quartile are in a 'deplorable' state. Statistics based on the mean (mean) fail to capture social phenomena in society. In cases like this, the median value better describes the real condition of the community. (2) The statistical tools used in the calculation of GDP also fail to capture several phenomena that can improve the welfare of citizens. The Commission illustrates that traffic congestion increases the value of GDP due to more fuel consumption. Furthermore, if citizens are concerned with noise pollution, air pollution, and even climate change, then statistical measurements that deny these factors clearly fail to capture true 'well-being'. Then, (3) the presentation of statistical facts often leads to misinterpretation of trends in economic phenomena. For example, GDP is overvalued, whereas the Net National Product (GNP) which takes into account the depreciation factor may be more relevant.
The fact that GDP is an inadequate unit to measure the level of welfare from time to time, especially with regard to the economic, environmental and social dimensions makes the Commission have the main task to unravel the current limitations. These factors are more commonly referred to as aspects of sustainability (sustainability). Distinguish between an assessment of current well-being and an assessment of sustainability. The first is more related to economic resources, such as income and non-economic aspects of people (what they do, feel, and the environment they live in). Meanwhile, sustainable welfare is based on the question: "Can the current level of welfare be passed on to the next generation?". The ability to inherit the current welfare is highly dependent on the continuity and sustainability of human capital reserves themselves (environmental, physical, human, and social).