Growth Models With Non-conventional Measures Of GDP
Author: Hafiz Faisal Umar

The report by Stiglitz et al., (2009) pointed out many weaknesses of GDP as a measure of economic welfare and social progress. There are a lot of indicators whom should be incorporated in the calculation of GDP. All the factors may not be added in the calculation due to data problems but, those indicators which can be calculated, should be added or deducted from the GDP. As many studies in the current literature emphasised on the fact that that GDP is not a good indicator of growth of an economy because it has many confines in it. GDP should be modified for the number of factors which are important and make a great contribution in GDP. In our study, we have calculated three modified versions of GDP as MGDP1, MGDP2 and MGDP3 in which we have added Home Production by women at home, subtracted Natural Resource Depletion and Debt Stock from the GDP. Home Production is the major part of the economy and still it is not included in the calculation of GDP. Home production is 25 to 40% of the GDP for different countries. Then we use four different growth models in which we re-estimate the growth of three South Asian Countries i.e. Pakistan, India and Sri Lanka over the period of 1980-2015. At first instance we use conventional GDP in a model then we use Modified versions of GDP instead of conventional GDP and then compare the results of both the estimations. The results of the study suggest that modified measures of GDP exhibit quiet different set of determinants. Therefor the growth literature with the objective to improve welfare needs a re-calculation with the better measures of GDP. Home Production, Resource depletion and debt stock are important factors of the GDP and these should be incorporated in the current GDP to get the clearer picture of the economic growth. Supervisor:- Dr. Atiq- ur- Rehman

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Supervisor: Atiq Ur Rahman

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