Chapter 6 - Assignment 3: Human Development Index

1. What are the advantages of using a measure such as the Human Development Index to compare economic wellbeing across countries?
2. Why might there be some problems is using per capita GDP as a way of comparing economic wellbeing in different countries? As part of your answer, consider the effect of differences in:
   • household production
   • pollution
   • crime
   • leisure time
   • income distribution
3. The closing section of this report notes the dramatic decline in per capita GDP in most CIS (the replacement for the former Soviet Union) countries. Is it reasonable, however, to make comparisons between current GDP and GDP 10 years ago in countries in which most prices were previously set by the state rather than the market?
4. While the Human Development Index may be a reasonable measure to compare wellbeing in different countries, would it be a very useful guide to policymakers conducting fiscal and monetary policy in a given economy? Why are most government policymakers more concerned with GDP?