GDP AND ALTERNATIVE INDICATORS FOR ASSESSING THE LEVEL OF COUNTRY’S DEVELOPMENT
Abstract. Usually the GDP volume measures the level of any economy development, but other indicators of a country welfare are underestimated. Some countries issued government bonds with interests payments tackled to GDP rates of growth. Emission of such bonds usually not taking into account the wave shape of GDP growth curve. After shock slide down of economy, usually high rates of growth are observed. Despite the fact that the economy may not have recovered even pre-crisis level, but payments on such bonds should be exercised. This situation takes place in the modern world economic space, when the economies of countries as a result of the «coronavirus crisis» can demonstrate a rapid decline with further significant growth. At the same time, it is almost impossible to predict both the duration and depth of decline and growth of economies.
In addition, the set of some ratios for the some economy parameters estimations is based on GDP level. Among them monetization and credit saturation of economy. However, they may not reflect the real level of fiscal potential of the country due to stock market capacity, technological progress, cryptocurrency development, shadow part of economy, social stability, environment protection and other factors.
Groupes of scientists try to invent new indicators, which may correct GDP weaknesses or, at least, help to create more realistic and more comprehensive picture of a country socio-economic development. The purpose of the article is to study the indicator of GDP and other indicators, that may objectively determine the level of a country development.
Based on the analysis of the IMF data on 264 countries over 10 years, the lack of correlation between the level of monetization and creditization of GDP and its dynamics was reviled, although such dependence should have been direct. This gave us the opportunity to assume that the GDP indicator does not fully characterize the development and socio-economic state of the country. It contains components that have no direct connection with the development of the economy. At the same time, the modern economic development acquires qualitative features to replace the quantitative characteristics on which the GDP calculation is based. Such qualitative aspects of development include digitization of societies, ecology, social security, product quality, not its quantity. They must be taken into account when determining the socio-economic level of development of countries.
Keywords: GDP, GDP warrants, monetization, crediting of economy, shadow economy, Happiness Report.
JEL Classification E660
Formulas: 0; fig.: 1; tabl.: 4; bibl.: 20.
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