The Usefulness of Gross Domestic Product as an Indicator of Economic Importance

615 Words2 Pages
The many measuring devices available to the economist requires a certain know-how of the subtle complexities that are contained with the art of interpretation of this deep and sophisticated collection of data and opinions. One specific measuring tool, the Gross Domestic Product (GDP), contributes to this collection as a useful tool, but only when properly used and implemented. The purpose of this essay is to discuss the overall usefulness of GDP as an indicator of economic importance. According to the text, GDP " is the value of final goods and services evaluated at base year prices." Within that definition are many terms that are complex and subtle within their own right. Production is one of these terms that is not very precise. To make such aggregating possible, you need to define what production is and what it is not. Gross domestic product excludes a great deal of production that has economic value. Neither volunteer work nor unpaid domestic services (such as housework, child rearing, do-it-yourself home improvement) make it into the accounts, and our standard of living, our general level of economic well-being, benefits mightily from both. GDP does not include the huge economic benefit that we get directly, outside the market, in other places such as from nature. Nature has aesthetic and moral value as well. Many people can experience awe, wonder and humility in our encounters with this force but we don't have to go so far as to include such subjective
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