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Q.

Will higher GDP means concentration of wealth in few hands? If so why?

Asked by Good Citizen, 03 Aug '10 10:39 am
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Answers (6)

 
1.

1)In a capitalist country/economy, concentration of wealth in a few hands is inevitable to certain extent when the GDP is growing higher and higher. After all, it is the profit motive and wealth creation that drives the business to push the GDP higher.
2)However, in an ideal situation, countries put in place right kind of policy frameworks, to make sure that higher GDP growth does not defeat the very purpose of equitable growth, even distribution of income across all sections of the society. Drivers of GDP growth like corporate are made to share their profit among the shareholders / investors, provide customer care / service and pay statutory duties like tax etc on time, follow fair and transparent business policies. This is to ensure that they do not get rich at the expense of the larger society and the State. If there is any breach, it inevitably leads to the concentration of wealth both good and bad in a few hands which would ultimately lead to social evils. We have seen that happ ...more
Answered by Tony Fernandez, 03 Aug '10 12:13 pm

 
  
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2.

Yes, Gross Domestic Product has been incorrectly used as an economic indicator of the economic health and wellness of a nation and its citizens . GDP is used extensively by economists worldwide as the only and true measure of the health of an economy. Higher GDP is only giving a false sense of economic security. Its importance as an indicator for the standard of living has limited utility. Herein, over the years criticisms of GDPs utility as a measure of an economys health and wellness are coming to the forefront. As economics is not an exact science, cause and effect cannot be measured properly and results can vary according to innumerable variables, some of which are too difficult to quantify. Hence, economists rely on a few quantifiable variables and extract from it, implications for the larger picture. Economics is more art than science . It can not indicate the real .personal and societal progress GDP, even in its flawed form is the best measure of economic progress.An oil Ri ...more
Answered by venkatesaldevarajan, 03 Aug '10 11:27 am

 
  
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3.

Ever since the Indian economy was liberalised or opened up, the sluggish economy soon made strides and began to soar, thnks to all those foreign direst investments, transfer of modern technology etc. Though the economic progress witnessed a higher growth of GDP, the growth stimulated by the liberalisation of the Indian economy was not all inclusive. The benefits of globalization of the economy didnot reach the grass root level or the rural and middle class population, but saw the benefit or higher GDP getting confined to the urban upper middle class and the rich. The reason for this lopsided growth is that the benefits of liberalisation is beneficial to these classes only in the form of higher compensationpackagefor those employed in the lucrative industrries and those owning and managing those industries. The agrarian sector was the worst hit consequent on the globalization of our economy, predictably the rural poor and the rural farmers are the worst hit.
Answered by thampy chacko, 03 Aug '10 11:12 am

 
  
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Healthy economies support diverse entrepreneurial efforts, leading to high economic growth. But concentration of wealth reduces diversity, and with it the most likely growth rate for a country's economy, according to the researchers.

"The implication is that nations with diverse economies should tend to outcompete on the world stage those with large concentrations of wealth, such as monarchies, or established democracies that have allowed their wealth to concentrate," said author Clarence Lehman, associate dean for research in the College of Biological Sciences.

But while the rate of wealth concentration was increased by high variation among individual investors' returns, it bore no relation to the average economic growth.

"This leads to the surprising finding that wealth will concentrate due to chance alone in growing, stagnant or shrinking economies," said author Steve Polasky, professor of applied economics in the College of Food, Agricultural and Natural Resource Sciences. ...more
Source: google search
Answered by anil garg, 04 Dec '11 07:09 pm

 
  
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5.

U see what has happened so far. GDP growth, from 2-3% to 9% has been observed. Condition of compititive has improved, but thinker has to only think and will be thinking forever.
Answered by kailashchandra bohra, 03 Aug '10 02:48 pm

 
  
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6.

Higher GDP means increase of wealth in few hands
Answered by dhanendra kumar jain, 03 Aug '10 10:54 am

 
  
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