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The Importance Of Human Development

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According to Measure of America website human development is the process of increasing people’s freedom to decide who to be, what to do, and how to live, as well as increasing opportunities and improving their well-being. (Measure of America, 2015)
GDP is an estimate of market quantity, adding together the value of all final goods and services that are produced and traded for money, within a given period of time normally quarterly basis or annually. It is typically measured by adding together a nation’s personal consumption expenditures (payments by households for goods and services), government expenditures (public spending on the provision of goods and services, infrastructure, debt payments, defense), net exports (the value of a country’s …show more content…
Some ‘nonmarket’ production is included in GDP, such as defense spending by the federal government and non-profit spending on emergency housing and health care. Moreover, the volume of goods and services consume by the average person clearly contributes to social welfare in the wider sense, while it is not only component of welfare. Similarly, GDP per capita is highly correlated with other factors that are important for welfare. Oulton argue that it is positively correlated with life expectancy and negatively correlated with infant mortality and inequality. Since parents naturally feel grief for children they have lost, so infant mortality might be used as an indicator of happiness. (Oulton, 2012)
However, many important economic activities are entirely excluded from GDP measurement, such as volunteer work, social capital formation within healthy family units, the costs of crime and an increasing prison population, and the depletion of natural resources. Since its creation, economist and statisticians who have experienced in GDP highlighted that it was only a measure of economic activity, not a social well-being. One of those is Simon Kuznets, the chief architect of the United States national accounting system and GDP. He warned against equating GDP growth with economic or social …show more content…
A 9-10 year increase in life-expectancy is equivalent to about 50 years of development in first world countries’. This is the major strength of GNH concept as a measurement of countries economic performance and human development. If GNH was used as an indicator of measuring happiness, and efforts are made to ensure happiness, the economy and its residents are sure to move towards development. Moreover, recently Bhutan has proposed that ‘happiness’ be considered as a Millennium Development Goal by the UN, apart from its existing goals. (Gupta, 2014) If this was accepted, then many countries of the world are trying to achieve that goal and may adopt GNH as a measurement of countries economic performance and human

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