GDP (Gross Domestic Product) is all about how “big” the economy is, i.e. what the total worth is of all the goods and services that a country produces. GDP is measured by adding up the monetary value of all the stuff a country makes in a year. That’s both material things like cars, as well as immaterial things like taxi rides.
Economists and politicians talk about the importance of growth all the time. All they’re really talking about is producing more stuff, which in some sense, can be a really good thing for an economy. But there are drawbacks to it too – both as a goal in itself, and as a measure of how well the economy is doing.
Just like other grand topics like ‘freedom’ or ‘justice’, ‘development’ means different things to different people, depending on their value systems and assumptions. At the same time, people often use the terms ‘developed’, ‘developing’, or ‘undeveloped’ to describe different countries and divide up the world. So what do they mean?
The Human Development Index is a measure that looks at income, health, and education to assess how well economies are doing. Its big idea is to find a number that would represent not just financial wealth, but freedoms and opportunities.
The Value of Life is how much money a group of people would collectively pay to save a ‘statistical life’ (which means reduce the number of them likely to die by one). Some economists think we can make better decisions about how we should balance increasing costs and increasing safety.
