The Stability In An Economy And Human Development Essay

The Stability In An Economy And Human Development - Essay Example Economists define and measure economic growth in terms of the increase in real GDP or the increase in real GDP per capita over some time period. GDP is a reasonably accurate and highly useful measure of how well or how poorly the economy is performing. By using the real GDP per capita as a measure of growth means we are considering the size of a population in the economy. And there some instances or things of importance that real GDP per capita either understate or totally does not account for. It does not accommodate the satisfaction or psychic income that many people derive from their work. The increase in leisure time has a clear positive effect on the overall well-being of the people. Next is the improved product/service quality. Because GDP is a quantitative measure, it fails to take into account the improvements in quality of products and services in the economy. The social costs of the negative by-products such as air, water, and noise pollution, are not deducted from the tota l output. These costs also reduce our economic well-being. GDP per capita does not tell us whether the composition of the output is enriching or detrimental to the society or how these goods/services are distributed. Just as a household’s income does not measure its happiness, GDP per capita does not measure its total well-being.  The 2010 Report introduces three new indices to capture important aspects of the distribution of well-being for inequality, gender equity, and poverty.... Equity is inherent in the ideal of progress and seen as the convergence of standards of equality of opportunities or social justice (Cardoso 1996, p.44). There should be an equal distribution of resources to make more economic opportunities by making productive assets, health and education more accessible to all and thus increase avenues for human development. The more equal the distributions of these resources, the more likely that income growth will be reflected in an improvement in the life of each individual. The Gender Inequality Index is more on the topics of how women are treated in the economy because they are more likely at disadvantage in dimensions of reproductive health, empowerment and participation in the labor force. It relates human development and the inequality of male and female in terms of their achievements. The Multidimensional Poverty Index is used to measure human development resulting from their socio-economic status. The degree of poverty is seen as the caus e for the deprivation or loss of access to education, health and higher standard of living. However, there are important indicators of human development that are not included in the index. This includes the empowerment, cooperation and security. The expansion of people’s capabilities involving enlargement in choices available and increase in freedom is where basic empowerment relies on. People should be free to do and choose what economic activities to participate in. Human development should also be concerned with how people interact and cooperate in their communities. As social beings, the sense of belonging becomes an important source of their well-being giving them