Gross Domestic Product (GDP)

Impact of GDP growth on national welfare.

5th sem

CSE-34

BTECH CSE

Submitted by
Submitted to
1. Rudraneel Sannigrahi(22051606)
2. Nilabhra Pal (22051592) Arvind kumar Yadav
3. Biprajit Das(22051581)

School of Computer Engineering 3rd Year

Kalinga Institute of Industrial Technology

(KIIT) Deemed to be University

Bhubaneswar, Odisha
 Introduction
GDP is one of the most universally accepted performance indicators/measurements to gauge a
country's economic well-being. It represents the market value of all final goods and services that is
produced in a country withim period ( usually year) used to check economic performance between
different time periods. Though the parasite relation is a thing to discuss and debate for long but here
we are concerned with that of GDP growth vis-a-vis national welfare, in terms of overall well-being
and quality life citizens undergo. The paper considers the effect of GDP growth on national welfare
and asks whether it is consistent with a satisfactory quality of life.

Define Variables
Gross Domestic Product (GDP): Represents the total value of goods and services produced in
an economy over a specified period. It can be measured in nominal terms (current prices) or real
terms (adjusted for inflation).
GDP Growth Rate: The percentage increase in GDP over a specific period, typically a quarter or
year. It is a key economic indicator used to evaluate the economic progress of a country.
National Welfare: Refers to the overall standard of living, which includes material well-being
(income, consumption, access to goods) and non-material factors such as health, education,
environmental quality, and personal freedoms.
Human Development Index (HDI): A composite index that measures a country's achievements
in life expectancy, education, and per capita income. Often used as a proxy for national welfare.
Income Inequality (Gini Coefficient): Measures the distribution of income across a population,
indicating how income is spread among different income groups within a country. A high Gini
coefficient suggests greater inequality, which can affect national welfare.
 Data
The data used to give the above analysis.

Units: US dollars and percent changeMediaType.RegularExpressions.ignore caseWorld Bank for

GDP|GDP growth rates
Human Development Index (HDI): United Nations Programs for Human Development
OECD or equivalent for Gini Coefficients and income inequalitymetadata

Years of focus: 2010-2023. Top countries: U.S., India, China, Germany and Brazil

The dataset will include:

Growth in Real GDP (Annual % change)

HDI scores
Gini Coefficients — for income inequality

Analysis (Trends and Prediction)

GDP Growth Trends:

Nations grew differently in GDP between the years 2010 and 2023; mainly spurred by global
economic events that included the financial crisis recovery, the COVID-19 pandemic, and disruptions
in supply chains.

China: Statically grew between the years of 2010 to 2019 but went sharply slow after the
pandemic.
India: Grew with strong growth up until 2019. Although it contracted with negative growth in
2020, it then followed a faster recovery curve.
USA and Germany: Trends have continued modestly with sharp declines due to the pandemic.
Brazil: Stagnation and slow recovery due to unstable politics and economies.
Forecast

Prediction:
With time-series forecasting models such as ARIMA or linear regression, for the emerging countries
such as India and China, the GDP growth curve will stabilize whereas for the United States and
Germany, it will continue on a slow but stable growth trajectory to improve per capita welfare

Correlation with National Welfare:

Countries with a remarkable GDP growth rate, like China, have shown the increase in material
well-being, but inequality and deterioration of the environment have muted overall welfare
increases.
Countries with low GDP growth rates, such as Germany, have maintained high national welfare
due to rigorous social safety nets, good health systems, and education levels.
Graphs and Trends:

GDP Growth vs. HDI: A trendline will make it apparent that GDP growth positively correlates with
HDI till some point later for which it goes through Diminishing Returns. More growth need not
mean more welfare.
GDP Growth vs. Gini Coefficient: Nations undergoing high GDP growth rates generally face
increasing income inequality which further goes against the national welfare. For instance, India
and Brazil are the examples of high growth but rising inequality.
Here is the graph showing the GDP growth trends of the United States, China, India, and Brazil from
2010 to 2023. It highlights the fluctuations in economic growth across these countries, with notable
declines during the pandemic and subsequent recoveries. The data underscores the different growth
trajectories, with China and India experiencing higher growth rates, while the US and Brazil have
seen more moderate or unstable growth

Interpretation

While, on the other hand, GDP growth is a handy measurement tool for the economic performances
of a nation, it fails to provide the integrated picture of national welfare. An economy characterized by
high GDP growth rates may have growing inequality and environmental degradation thus dampening
the perceived quality of life of its citizens for many. For example, a country could enjoy higher though
less sustainable growth for the entire nation while lower might be achieved through stronger social
support systems, better health care, and more equitable wealth distribution.

Key Takeaways:

Conclusively, GDP growth is important but not enough for national welfare to be upgraded.
 Countries with better social infrastructure and less inequality tend to have a relatively better level
of national welfare.

Over-reliance on GDP as a measure of well-being can overlook critical non-economic factors,

such as environmental quality, social justice, and individual freedoms.

Therefore, excessive reliance on GDP as a tool for measuring well-being can easily overlook certain
very important non-economic factors such as environmental quality, social justice, and individual
freedoms.
 Conclusions

This report suggests that an increase in GDP is a very important measure of an economy's strength,
but it has to be supplemented by other measures of metrics in order to really get the feel of the
welfare of the nation. Inclusive growth is where benefits of economies' growth are equitably
distributed. Investments in health, education, and social safety nets are very essential towards
improving national welfare. Ultimately, a balance between economic growth and social development
has to be achieved in order to nurture sustainable improvements in quality of life.