They say what matters most in life are the things money can’t buy. So far, we’ve been paying attention to a figure that’s intimately linked to the things money can
They say what matters most in life are the things money can’t buy.
So far, we’ve been paying attention to a figure that’s intimately linked to the things money can buy. That figure is GDP, both nominal, and real. But before you write off GDP as strictly a measure of wealth, here’s something to think about.
Increases in real GDP per capita also correlate to improvements in those things money can’t buy.
Health. Happiness. Education.
What this means is, as real GDP per capita rises, a country may also see related benefits.
As the figure increases, people’s longevity tends to march upward along with it. Citizens tend to be better educated. Over time, growth in real GDP per capita also correlates to an increase in income for the country’s poorest citizens.
But before you think of GDP per capita as a panacea for measuring human progress, here’s a caveat.
GDP per capita, while useful, is not a perfect measure.
For example: GDP per capita is roughly the same in Nigeria, Pakistan, and Honduras. As such, you might think the three countries have about the same standard of living.
But, a much larger portion of Nigeria's population lives on less than $2/day than the other two countries.
This isn’t a question of income, but of income distribution—a matter GDP per capita can’t fully address. In a way, real GDP per capita is like a thermometer reading—it gives a quick look at temperature, but it doesn’t tell us everything.
It’s far from the end-all, be-all of measuring our state of well-being. Still, it’s worth understanding how GDP per capita correlates to many of the other things we care about: our health, our happiness, and our education.
So join us in this video, as we work to understand how GDP per capita helps us measure a country’s standard of living. As we said: it's not a perfect measure, but it is a useful one.
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GDP whether normal or real does not count for externalities, is the service for curing people injured from pollution coming from certain industry counts in GDP, it should be deduced from contribution of that industry
In the video, you show many different correlations between positive non-GDP outcomes (health, happiness) and real GDP per capita. Eyeballing the correlations you offer, the longest life expectancies are correlated with RGPC of ~$10k+, happiness with ~$8k+, human development index's best 50% with ~$10k... this leads me to an interesting set of questions - has a maximum sustainable global real GDP per capita been calculated (or is it reasonable to do so?), and if so where does that value fall against what we can infer from the associations of RDPC and health, happiness, and development?
In other words - can I estimate from this that there is enough to go around? Or might w estimate that at a population size of X, there is no longer enough to go around, and net health, happiness, and development must therefore fall?
I suppose I'm asking if one can create a Malthusian argument using population size, real GPD per capita, and the correlations with non-GDP outcomes that is more refined than "we will all starve to death because so many mouths!"
If a country has produced goods worth of $100 billion but goods worth of $50 billion were sold and rest of the goods remain unsold during the year..in this case what will be the GDP of a country.....do we need to consider these unsold goods as a part of GDP or not.......