Limitations of GDP as a Measure of the Standard of Living
Resources
Read/review the following materials for this activity:
Textbook: Chapters 7
PPT: Chapter 7
Link to RFK Video (https://youtu.be/77IdKFqXbUY)
Most Economists, Policymakers, Social Scientists, and Business Analysts use a countrys real GDP per capita as the main indicator of the average persons standard of living in that country. Robert Kennedy expressed his disagreement with the over-reliance on the use of GDP (Links to an external site.) with the following comments:
Gross Domestic Product, he argues does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our courage, nor our wisdom, nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile, and it can tell us everything about America except why we are proud that we are Americans. – Senator Robert Kennedy, 1968
Essay Instructions:
In your essay, address the following:
Identify the current GDP per capita for the USA, Canada, and Mexico (for the latest period available). What is the growth rate of GDP per capita for each of these countries between 2017 and 2021? (75 Points – 25 points for each country)
Do you agree or disagree with the late Robert Kennedys assessment of the importance of GDP per capita in determining the standard of living? Provide reasons to support your position. (125 Points)
In acknowledgment of the shortcomings of the use of GDP several alternative measures have been developed to supplement the quantitative measure of GDP per capita. Discuss 2 of these alternative measures. (100 Points)
