Many political economists believe that the soundest indicator of the economic health of a nation is the nation’s gross national product (GNP) per capita—a figure reached by dividing the total value of the goods produced yearly in a nation by its population and taken to be a measure of the welfare of provide services such as education, clean water, medicine, public transportation, and mass communication for their residents.
The economists defend their use of per capita GNP as the sole measure of a nation’s economic health by claiming that improvements in per capita GNP eventually stimulate improvements in human indicators. But, in actuality, this often fails to occur. Even in nations where economic stimulation has brought about substantial improvements in total wealth frequently obscures a lack of distribution of wealth across the society as a whole.
In light of the potential for such imbalances in distribution of economic benefits, some nations have begun to realize that their domestic economic efforts are better directed away from attempting to raise per capita GNP and instead toward ensuring that the conditions measured by human indicators are salutary. They recognize that unless thrive even if their per capita GNP remains stable or lags behind that of other nations.
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