Article and Case Summaries Research Paper Example | Topics and Well Written Essays - 1250 words

Article and Case Summaries - Research Paper Example in other words between what the real economy is actually especially with regard to the impact of the economy on ordinary people, on the one hand, and the use of GDP as the measure, on the other. The authors talk about the way GDP distorts reality, as when it fails to account for damage to the environment as a result of economic activities. GDP sees environmental destruction as revenue, whereas in truth damage to the environment is a loss. GDP counts social havocs, such as health problems and divorce, as gain. GDP excludes non-money transactions, such as those that occur outside of the realm of the formal economy. GDP also fails to account for the long-term fiscal damage wrought by debt on the economy, seeing consumption based on credit as a plus. The alternative measure they are proposing, termed Genuine Progress Indicator or GPI, generally addresses the shortcomings of GDP as a measure of the economy for policy and other vital public purposes (Halstead and Cobb, 1996). The alternative GPI measure has for its rationale plugging what the authors perceive as the ignored aspects of the economic reality in the GDP, as well as taking into account some vital costs that GDP now does not measure, including the environmental costs of economic activities, income distribution which is tied to economic justice, and non-money contributions to the economy, such as those that are tied to housework and to taking care of matters in the home. The authors furthermore contend that there are some of the things that GDP either does not see, or sees, but sees as positive and contributing to growth, when they actually hinder growth. GPI corrects these by counterbalancing GDP growth revenue items with cost items. The hope is that GPI will be a more accurate measure of the state of the economy, and that GPI will be a better basis for crafting policies for true growth (Halstead and Cobb, 1996). The article makes an interesting case for imputing some costs, such as environmental costs,