What Is Genuine Progress Indicator (GPI)?
A true growth indicator (GPI) is a measurement that measures the economic development of a nation. It is usually thought of as an alternative measure that is more widely used in the GDP (GDP) the economic indicator. It is a metric that measures the GPI indicator takes everything that the GDP indicator uses, however, it also includes other numbers that reflect the cost of negative consequences relating with economic activities, like the cost of crime, the cost of ozone depletion and the cost of depletion of resources and many more.
The GPI calculates the positive and negative outcomes of economic growth in order to determine whether it has benefitted individuals in general.
How the Genuine Progress Indicator Works
The Genuine Progress Indicator is an attempt to assess whether the environmental and social cost of consumption and production in a nation are either negative or positive for overall health and wellbeing.
The GPI measure was developed as a result of the concepts in eco-economics (which considers the market for economic goods as a component of the ecosystem). The advocates of the GPI consider it to be an improved indicator of the viability of an economy contrasted with the GDP measurement. Since 1995 it has become a more popular indicator. GPI indicator has increased in importance and has been utilized in Canada as well as it is also used in United States. Both countries continue to report their GDP figures to stay on the same track with the more common method of reporting.
History of Genuine Progress Indicator
In the 1930s in the 1930s, the Roosevelt administration looked for methods to gauge the output of the American economy after it instituted policies to fix an economy that was failing, using unreliable information. 1 The Department of Commerce enlisted National Bureau of Economic Research economist Simon Kuznets to establish more appropriate economic indicators than what was previously utilized. As a result, he presented the Congress his study “National Revenue 1929-1935” which created”the concept of Gross Domestic Product (GDP).
