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2015-07-08

GDP and employment both are important

Comments on Rajiv Kumar "Job growth not GDP growth matters for India", 8/07/2015

I find the title interesting.

While it is important to have a focus on employment growth, it does not mean that GDP growth is unimportant. Only focusing on GDP without attention to employment is not right, particularly in terms of inclusive growth and equity or income inequality. Equally problematic is that only focusing on employment without due attention to GDP growth. Neither is good for economic policies.

I am not familiar with the Indian economy and its statistics, if the author is correct in relation to GDP and employment growths, it may mean that the GDP growth was not enough to boost employment more significantly.

Alternatively, it reminds us about the US economy back a few years ago when it was labelled as jobless recovery. If that is the case, it may mean that it is only a matter of time for growth in employment to catch up with GDP growth.

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