TITLE:
Is the Gross Domestic Product (GDP) a Reliable Indicator of the Economic Growth and Future Economy of the United States of America?
AUTHORS:
Krzysztof Bryniuk
KEYWORDS:
Gross Domestic Product, Economic Growth, Economy, Economic Predictors, U.S. Economy, Economic Indicator
JOURNAL NAME:
Open Access Library Journal,
Vol.10 No.4,
April
28,
2023
ABSTRACT: The Gross Domestic Product (GDP) is the most common indicator used to measure economic growth. It is calculated by adding up all the expenditures in an economy from production, consumption, and government spending. This common indicator is still used by mainstream economists. However, it has been shown that this indicator does not accurately represent economic growth because it fails to consider many additional factors including diminishing industries and services, inadequate income distribution, rapid growth of financial sector, environmental disasters, growing national debt, etc. These factors cause a distortion in the measurement of economic growth. Omitting these factors leads to the underestimation or overestimation of real economic activities. It also contributes to incorrect assumptions about what is happening within an economy which could potentially cause us to make incorrect predictions about future economic growth. It should be noted that the GDP was implemented during the era of manufacturing. During the past decade, the US lost a significant number of manufacturing jobs and now the service industry segment accounts for over 80% of jobs. The current Gross Domestic Product is an “artificial” and distorted measure of economic growth, and it does not accurately reveal the future of the U.S. economy. The author recommends a major revision in this “artificial” and misleading measure to make it a more accurate and useful tool.