Growth and development Beppe Robiati
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© Beppe Robiati   Design & Webmaster: Claudio Malvezzi
Author & ©: Beppe Robiati   Design & Webmaster: Claudio Malvezzi
Author & ©: Beppe Robiati   Design & Webmaster: Claudio Malvezzi
Growth and development
Growth and development Beyond the GDP theory Spiritual Indexes The subject of growth is of great importance in economic studies. Universities, national statistical agencies, economic institutions studying the advancement of countries’ domestic economy, large banking and financial institutions deciding where and how to invest poples’ savings. National governments competing against each other for economic growth and higher progress, international agencies such as the World Bank, the International Monetary Fund and the World Trade Organization: all of them involved in reaching the objectives of assisting development and reducing poverty across the world. The same applies to industrialists and entrepreneurs, who plan the future expansion of their companies, investigating and deciding where to set up new plants or which new markets to conquer often study the phenomenon of growth. All of us, to a lesser degree, are curious and wanting to better understand the concept of growth in order to decide, more wisely, where to invest our savings or where to move, one day, in order to live “in a better world”. Traditionally, the study of growth phenomena starts from the observation of the economic market and goes through the detailed analysis of the desires of individuals, of their earnings, what they produce and consume and is then summarized into small percentage numbers, called “indicators” or “indexes of development” comparing the growth from one year to the next in various economical areas. The result is simple and easy to read, but we all know that behind those concise figures lies a thorough investigation and a long and meticulous analysis including the study of surveys filled o      Beppe Robiatut by individuals, families, entrepreneurs, companies, institutions, professional associations, unions, universities, local and national business agencies, the scrutiny of reports released by ministries, statistical agencies and national banks, who are experts in the subject. Widening the analysis moving from the local to the national and international levels, the number of agencies and people involved increases and so does the time spent on these investigations. I would like to examine with the reader the current approach of these researches and understand if the analytical methodology employed can be considered as satisfactory and if the summarized numerical result of the analysis does provide a “fair and true” picture. The national growth index: GDP (Gross Domestic Product) In economic terms the Gross Domestic Product (GDP) is “The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports”[1]. In other words the GPD is the total amount of incomes generated by all the people producing goods and services in a given country. The economic growth of any country is measured by comparing the GPD of the current year with the one of the year before. The difference generates the percentage index, which indicates how much the GDP has grown over the previous year in real terms.