Based on the article, I will be answering the questions posted on the main blog page.
Was he correct?
From the article, we are able to determine the successfulness in achieving or the achievability of the macroeconomic objectives mentioned in the article through national income. To identify if those macroeconomic objectives have been achieved, the article infers that this can be done by looking at the national income of a country which is measured by the country's GDP. It is assumed that if those macroeconomic objectives have been achieved, that would mean that the welfare of that nation is better. I do think that what Kuznitz said is correct as I feel that by looking at merely GDP, a nation's welfare can only be superficially deduced and its deduction is only from a financial perspective. If a nation were to have a higher GDP than another nation, that would lead to the assumption that the welfare of the nation with the higher GDP is higher than that of the nation with the lower GDP. GDP does not truly determine the welfare of a nation as it only looks at the welfare of a nation from a financial perspective. It is not accurate in measuring the welfare of a nation as GDP measurements can be flawed as some countries might reflect higher GDP when government expenditure increases. That does not necessarily pass onto the welfare of the nation despite the increase in government expenditure. Also, if a GDP of a nation, for example, China is higher than that of the GDP of a nation like France, that does not determine the welfare of the nation, for example the standard of living of the people in that nation. A lot of production takes place in China, especially that of production in the secondary sector, which comes with a big disadvantage as that has passed on as an increase in environmental pollution. Therefore, despite China having higher GDP than France, the people of China live in an environment that is more polluted than the people in France, so the welfare of people in France is better than that of people in France.
Should we be measuring something else?
Based on what Kuznitz concluded, I think that we should measure something else in order to get a more accurate measure of the welfare of the nation. We should take other factors into consideration, probably non-financial factors in order to come to a more precise inferrence of the welfare of a nation. But we do not have to completely disregard the measurement of national income as that can also be one of the factors taken into consideration to come to the deduction of the welfare of the nation.
Why do most countries use GDP anyways?
Statistically, governments of different nations collect data as an indication of the nation's economic performance as it is more convenient and more accurate to do so with figures in order to compare the nation's past performance with its present and to compare its perfomance with that of other nations'. GDP is used by most countries as GDP can be used as a reference in assumptions of other factors in a coutry, like a country's wealth or poverty and also GDP can help lead to general conclusions for example, a higher GDP is indicative of an economy that has a higher level of output.
In conclusion, I find that GDP is valid and is a good indication as to how well a nation is doing in economic terms but it is not necessarily the most accurate as other factors should be taken into consideration in order to come up with accurate inferences. GDP is important, its importance depends on the which persepctive of a nation we are examining but it should be combined with other factors that should be taken into account to come up with a more thorough and holistic inference.
Was he correct?
From the article, we are able to determine the successfulness in achieving or the achievability of the macroeconomic objectives mentioned in the article through national income. To identify if those macroeconomic objectives have been achieved, the article infers that this can be done by looking at the national income of a country which is measured by the country's GDP. It is assumed that if those macroeconomic objectives have been achieved, that would mean that the welfare of that nation is better. I do think that what Kuznitz said is correct as I feel that by looking at merely GDP, a nation's welfare can only be superficially deduced and its deduction is only from a financial perspective. If a nation were to have a higher GDP than another nation, that would lead to the assumption that the welfare of the nation with the higher GDP is higher than that of the nation with the lower GDP. GDP does not truly determine the welfare of a nation as it only looks at the welfare of a nation from a financial perspective. It is not accurate in measuring the welfare of a nation as GDP measurements can be flawed as some countries might reflect higher GDP when government expenditure increases. That does not necessarily pass onto the welfare of the nation despite the increase in government expenditure. Also, if a GDP of a nation, for example, China is higher than that of the GDP of a nation like France, that does not determine the welfare of the nation, for example the standard of living of the people in that nation. A lot of production takes place in China, especially that of production in the secondary sector, which comes with a big disadvantage as that has passed on as an increase in environmental pollution. Therefore, despite China having higher GDP than France, the people of China live in an environment that is more polluted than the people in France, so the welfare of people in France is better than that of people in France.
Should we be measuring something else?
Based on what Kuznitz concluded, I think that we should measure something else in order to get a more accurate measure of the welfare of the nation. We should take other factors into consideration, probably non-financial factors in order to come to a more precise inferrence of the welfare of a nation. But we do not have to completely disregard the measurement of national income as that can also be one of the factors taken into consideration to come to the deduction of the welfare of the nation.
Why do most countries use GDP anyways?
Statistically, governments of different nations collect data as an indication of the nation's economic performance as it is more convenient and more accurate to do so with figures in order to compare the nation's past performance with its present and to compare its perfomance with that of other nations'. GDP is used by most countries as GDP can be used as a reference in assumptions of other factors in a coutry, like a country's wealth or poverty and also GDP can help lead to general conclusions for example, a higher GDP is indicative of an economy that has a higher level of output.
In conclusion, I find that GDP is valid and is a good indication as to how well a nation is doing in economic terms but it is not necessarily the most accurate as other factors should be taken into consideration in order to come up with accurate inferences. GDP is important, its importance depends on the which persepctive of a nation we are examining but it should be combined with other factors that should be taken into account to come up with a more thorough and holistic inference.