Perhaps most important, GDP was not meant to be an anchor metric for targeting national economic performance or a measure of national well-being. GNI is the total amount of money earned by a nation's people and businesses. Yet, governments, businesses and probably most people swear by it. For the latter, there are many alternative measures, including the Human Development Index (HDI), introduced by the United Nations in 1990, and the OECD’s Better Life Index. Economic indicators measure macro-economic variables that directly or indirectly enable economists to judge whether economic performance has improved or deteriorated. If output grows, but only a direct rate of population grows, economic growth is zero. So what drivesa country towards achieving these goals? There is little difference between GDP and GNP for the US, but the two measures can differ significantly for some economies. In the first place, economic growth is defined as sustained annual increases in an economy’s real national income over a long period of time. Thus, a country’s growth can be broken down by accounting for what percentage of economic growth comes from capital, labor and technology. 2 2. Main Benefits of Economic Growth Higher living standards – i.e. There are two methods used to work out the GDP value of an economy. It can be measured in nominal or real (adjusted for inflation) terms. A recession is a period of negative economic growth, where output falls for two consecutive quarters. Measuring the strength of the economy, however, can be difficult as it depends on surveys and administrative source data that are necessarily imperfect and incomplete. Broadly speaking, there are two main sources of economic growth: growth in the size of the workforce and growth in the productivity (output per hour worked) of that workforce. Does this constitute real economic growth? This Economic Letter examines the historical and recent behavior of these two employment measures to answer these questions. They disagree, however, if increased spending is an indication of growth. Different methods, such as Gross National Product (GNP) and Gross Domestic Product (GDP) can be employed to assess economic growth. ADVERTISEMENTS: Economic growth is now measured by increases in a country’s per capita net national product. Some would certainly say yes. National income accounting refers to the bookkeeping system that governments use to measure the level of the economic activity such as GDP. The graph below shows the federal budget … I put well-being index as number 5 to show economic performance could be measured by a wider criteria than just GDP. The most used measure for national economic growth is the change in Gross Domestic Product (GDP).

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