Beyond the index of GDP in HDI: New measures of economic power of nations

Majumder, Amlan, and Takayoshi Kusago (2010). "Beyond the index of GDP in HDI: New measures of economic power of nations" Paper presented at the 7th annual conference of the HDCA, 21-23 September 2010, Amman, Jordan.

The objective of the paper is to compute new measures of economic power of nations according to average and total principles. Even though a considerable amount of theoretical and methodological advancements took place in studies on measurement of wellbeing at individual level, such measures are not to reflect macroeconomic state of affairs, as the methodology intuitively no longer focuses on income today, but on what income does to human beings. Moreover, we understand that the concept of economic well-being is a theoretical construct, which initiates welfare analysis at individual level only. Still individual level (average) well-being conditions are often translated into those of the nations. We also observe that the index of GDP in HDI for developing countries may not always reflect true pictures. We try to bridge the gaps by computing the proposed new measures as mentioned above. While computing the measures we have made some advancements in methodology in regard to discounting income with respect to a defined threshold level making adjustments for economic inequality. The study utilises data from Human Development Reports 2007/2008 and 2009.
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