GDP

Visit the Australian Bureau of Statistics homepage and click the Key National Indicators link.

a. Locate the National Accounts page. What is the seasonally adjusted estimate of the GDP growth rate for the most recent quarter reported? Scroll down the page to find the Expenditure Chain Volume measures. Which category of expenditure grew the most?
b. Scroll further down the page to find the largest fluctuation in growth rates over the last six months?
c. Find the Income at Current Prices table. How much did compensation of employees grow in the last quarter?
d. Use the latest Household Saving Ratio figure to determine how much of household disposable income was devoted to consumption.

Other Measures of Progress

While the GDP measure provides important information to economists, policy makers and others, it is not in itself an indicator of social well-being. Organisations such as Friends of the Earth and the United Nations have attempted to develop other indicators in order to measure social progress over time and between countries. Visit the Friends of the Earth Measuring Progress site for discussion about the inadequacies of the GDP measure and an explanation of the Index of Sustainable Economic Development (ISEW).

a. What are some of the arguments presented here against using GDP growth as a measure of progress?
b. Have a look at the quote from Simon Kuznets on the Briefings page. Give an example illustrating how GDP growth may not result in an improvement in national welfare.
c. While the ISEW may be a reasonable measure of social progress, would it be a very useful guide to policy makers conducting fiscal and monetary policy in a given country? What are the advantages of the GDP measure for policymakers?