Natural disasters and large scale human error can have mixed impacts on a country’s GDP (e.g. New Zealand’s 2011 Christchurch earthquake, Japan’s March 2011 earthquake and tsunami, the 2010 U.S. Gulf of Mexico oil spill, floods and cyclones in Queensland in early 2011).
Using one of the above examples, explain why natural and human- induced disasters often have mixed impact on GDP. (100 – 150 words)

A series of disasters in recent years has affected economic growth in a country's GDP. Natural disasters are a "negative supply shock" as production processes are disrupted and business assets are damaged. (Reserve Bank of Australia, 2011) The floods and cyclones in Queensland in 2011 have largely impacted the GDP mostly due to the disruption of coal production. The floods also affected the agricultural areas, slowing down production and decrease in the quality of the products. The RBA (2011) has made a conclusion that the GDP growth in those quarters could be around "1/2 percentage point lower" than what it could've been.
Use your example to briefly demonstrate the limitations of the current methods used to measure GDP. (about 50 – 100 words)
The current methods used to measure GDP have limitations as it is "not necessarily a good measure of production as a contribution to economic well-being." (Mitchell & Wray) The social, health, and environmental costs of these disasters are not deducted from the value of the goods and services produced. GDP also excludes quality improvements of products over time. For example, if the crops, over time improve in quality as nature restores itself over time GDP doesn't take into account the improvement of the product. Non-material aspects of welfare are also excluded in measuring GDP, such as citizens getting sick as an effect from the floods and cyclones.

Reference List

Mitchell, W., & Wray, R. (n.d.). Modern monetary