Question

The concept of GDP as a standard tool for sizing up a country’s economy was first conceived by____

(a) John Maynard Keynes
(b) Bretton Woods conference
(c) Simon Kuznets
(d) Adam Smith

Answer 1

Option C

More Information

■ History of GDP :-

• The modern concept of GDP was first conceived by Simon Kuznets, 1937. It is the value of all final goods and services produced within the boundary of a nation within its border during a year period.

• In 1944, following the Bretton Woods conference that established international financial institutions such as the World Bank and the International Monetary Fund, GDP becomes the standard tool for sizing up a country’s economy.

• In 1959, Moses Abramovitz became one of the first to question whether GDP accurately measures a society’s overall well-being. He cautions that “we must be highly skeptical of the view that long-term changes in the rate of growth of welfare can be gauged even roughly from changes in the rate of growth of output.”

• 1972: Upon being named king of Bhutan, Jigme Singye Wangchuck declares his aim is not to increase GDP, but GNH — “gross national happiness.”

• June 1978: Writing in Britain’s The Economic Journal, Irving B. Kravis, Alan W. Heston, and Robert Summers compile the first estimates of GDP per capita worldwide, with figures for more than 100 countries.

• 1990: The United Nations launches the Human Development Index, which measures such factors as education, gender equality, and health. U.N. economist Mahbub ul Haq convinces future Nobel laureate Amartya Sen to create “an index as vulgar as GDP but more relevant to our own lives,” as Sen remembers it.

• December 7, 1999: The U.S. Commerce Department declares GDP “one of the great inventions of the 20th century.”

• September 2006: China creates a new index for “green GDP” — a measure of national economic output that takes environmental factors into consideration. The first report finds that environmental damage, had it been accounted for, would have knocked 3 percent off China’s GDP in 2004.

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