Question

Describe two events from the past (for any country, actual, not made up) that have impacted living
standards but are not well measured by GDP. Try to come up with one event for which living
standards rose more than GDP would indicate, and one event for which living standards rose less than
GDP would indicate.

Answer 1

GDP & Standard of Living
Gross Domestic Product of a country measures the money value of all final goods and services produced in the domestic territory of the same. As it is able to measure the increase in goods and output produced in nominal and real terms, it lacks the ability to measure the increase in the standard of living accurately. The increase in growth in output terms alone cannot observe the level of standard of living of a country. The growth in GDP of different countries and their ranks in standard of living is an example for the disparity in GDP and standard of living.
New Zealand is a country which ranked top in standard of living. The growth rate of GDP in 2018 was just 2.8%. This stands as a false example of analyzing the standard of living by growth in GDP. There are many countries who have greater level of growth in GDP including China, India, Bangladesh etc. But none of these compete with the standard of living of that of New Zealand.
The increased efficiency and competition in agricultural sector can be considered as an event that increased the standard of living of New Zealand even without showing a direct indication in GDP. The effective growth of agricultural sector initiated in raising the standard of living of farmers and low income groups thus reducing inequality. A stable and constant growth in every sector made the process of increasing standard of living in the country.
China being evolved to be competitive in industrial sector has largely affected the growth of GDP of the country. The focus of economy in urban areas has increased the level of output through industrial promotion. This has made large impact in inequality between urban and rural areas which does not contributed much to raise the standard of living. The cheap rewards to the labor force and exploitation for economic growth all made an impact on GDP but not in that of living standard.