GDP is not really growth index or representation of economy

[kentrolla]

Do we really consider economy by GDP ? My answer would be no, If you look at world's largest economies their foods are slow poison and every single thing is expensive compared to some under developed nations. I had chance to see some Central Asian landlocked nations and was really surprised to that they organic foods and there are no adulteration unlike our chemically processed food which we consume and the best part is that they have their own house's and a backyard garden where they grow their own fruits and vegetable for consumption wherein on the other hand our living space has been squeezing as we develop further but guess what our GDP is increasing, But all the profit goes to the big capitalists who are on top of everything. 

GDP doesn't represent the citizens growth of that particular nation when the average working class people are paying exorbitant price for rent and food wherein there are countries where people are living peaceful countryside life paying less than 1/10th of what we pay for food.

There are pros and cons of these nations which I am referring to but I thought of highlighting the basic necessities and how it's been robbed from us in the developed nations in the name of growth and higher GDP has nothing to do with growth or happiness of people which is often misunderstood. Because there is no economy which has nothing to do with people of that nation.

[Jawhead999]

GDP is can be used to measure the whole economy of a country, but since you're talk about growth or happiness of the citizen, GDP is useless. To know that we need to take a look on median salary, not GDP or average salary.

If there are 100 people, consist of: 10 rich people, 30 average people and 60 poor people. Judging it from GDP or average salary, we might judge the country has a good economy since the 10 rich people net worth is same to 10,000 poor people. But judging it from median salary, there's a problem on wealth distribution.

[Tytanowy Janusz]

but since you're talk about growth or happiness of the citizen, GDP is useless. To know that we need to take a look on median salary, not GDP or average salary.

Bigger pay = more happiness? I am far from this statement. I am far from saying that a higher average salary = more happiness in society. According to the great writer and historian - Harrari, it is possible that we were happiest as humanity before the Neolithic agrarian revolution, 10,000 years ago, as hunters and gatherers and the domestication of plants and animals was our curse. median salary was equal to 0$.

@OP In the USA, everything is expensive, but you also earn much more. And ultimately, if you have to buy something in another country, it is better to buy living and earning money in a country with high GDP from a country with low GDP than the other way around. for example, a new iPhone 15 costs $800 in the USA, which is 6 days of work taking into account the median salary. in my country it is 15 days, in poorer African countries it is several months. The same applies to cars, computers, and household appliances. In my country, 1 m^2 of an apartment takes about 5-10 weeks of work to buy, in the USA it takes 4-7 weeks.

But there are states in the US where you can still live the life you described. buy a big ranch in texas and raise your own cattle. no one is forcing you to live in manhattan

[Don Pedro Dinero]

This is what happens with economic concepts. GDP is useful to get an idea, but if you want to know more about the reality of a country's economy, especially the economy of the people, you will need to know more about average and median wages. In the stock market it is similar, a central concept to decide whether to buy a share is the P/E ratio, but you can't just stick to that, you have to compare it with the sector, the debt, the free cash flow, the evolution in the last five years, etc.

[Husires]

Macroeconomic measures are greater than the prices of apartments, rent, and food prices, even if it is part of the basket through which inflation is calculated as one of the most important measures that the state adopts to set its monetary policies, and the fact that food is at a high price, but there is a good rate of wages, and an individual, with a regular job, can get Sufficient food, education, and housing in a comfortable place with basic services is sufficient in many countries. Just as the countryside has advantages, there are disadvantages in terms of the quality of education, access to health and medical services, the Internet, and receiving your products with a click.

[franky1]

GDP does not even represent Domestic Product
these days with money printing, the money becomes the "product" not the manufacturing/harvesting of domestic products sold to retail->consumers

the money printing does not end up in M1"cash"-M2"balance" of working class, middle class (majority) of population. it gets syphoned off into off shore accounts out of circulation and then only accounted for on the books to appear as if its part of a country domestically
...
the problem is whilst the real money is hidden away in big pockets.. the totals are divided by population overall. which makes things unfair for the working/middle class
because once averaged out unfairly. real estate agents use those unfair numbers to then say average person can afford mortgage payments of #0% of the average.. thus they raise the rates and housing prices/rents

[ivankoh]

I agree, GDP is not the only measure of economic growth, but it is an important index to measure and from there the national government will adjust, change, measures and policies to match compatible with the economy and promoting people's lives. That means considering GDP = happiness or prosperity of the people would be flawed and wrong. Increased GDP stimulates production, but economic growth promoting increased demand is reasonable, but on the contrary, it will push the economy into deficit and increase inflation. Therefore, I agree that GDP does not reflect or represent people's lives. Specifically, when GDP increases, only a small part will benefit, the rest will bear big risks from work, income, environment, health, education... That is even a serious imbalance.

[coupable]

GDP is not really growth index or representation of economy

On the contrary, it is an indicator of the extent of the prosperity of the economy, but it is not evidence of the luxury of life as in the example you mentioned. According to the happiness indicators prepared by specialized research centers, several criteria are based, of which the gross domestic product is one of them. The result is that the happiest countries, according to these studies, almost all of them do not have a good raw domestic product, meaning that the country’s economy is not that good.
Gross domestic product is generally an economic indicator for comparison between economies and not between individuals from one country to another.

[Darker45]

GDP is one way to measure economic growth. So, yes, it represents the economic situation of a country so to speak. However, it isn't a way to measure the well-being of the country's population. So, if you speak of what the people are eating on a daily basis and whether their food is healthy or not, that's not something that's measured by GDP. A high GDP doesn't necessarily mean the people are happy. A high GDP doesn't even mean the people are living well. GDP only measures the country's overall good and services produced within a certain period.

[EarnOnVictor]

You are just conflicting facts, maybe you should go back to your studies of the economy and draw the right facts once again as aggression or personal belief will solve nothing. The GDP is a major part of the economy and it entails a whole lot things to butress this fact. All the outputs of the masses and government in the country, the purchases of goods and services and many more contribute to the GDP of a nation. I wonder why such won't contribute to the growth of the economy in your own dictionary. What I believe you are trying to establish is that the country might be moving forward in the economy, in which GDP contributes, yet the masses are suffering, inflation going towards the roof. But these are separate economic reviews where some policies need to be adjusted for the betterment of the masses.

In cases like this, it's possible that the government is getting richer and a few private individuals too, but the wealth doesn't fairly circulate among the masses. This kind of situation is happening in Nigeria now, yet the economy is positive economic-wise, but the masses are suffering and more people are being dropped into the level of poverty. However, the source has to be tackled through viable policies by the government which is a different ballgame and the situation will never stop the fact that GDP is part of a country's economy. One of the best approaches here is social intervention coupled with a positive trade balance where the nation is not import reliance but otherwise.

[kentrolla]

You are just conflicting facts, maybe you should go back to your studies of the economy and draw the right facts once again as aggression or personal belief will solve nothing. The GDP is a major part of the economy and it entails a whole lot things to butress this fact. All the outputs of the masses and government in the country, the purchases of goods and services and many more contribute to the GDP of a nation. I wonder why such won't contribute to the growth of the economy in your own dictionary. What I believe you are trying to establish is that the country might be moving forward in the economy, in which GDP contributes, yet the masses are suffering, inflation going towards the roof. But these are separate economic reviews where some policies need to be adjusted for the betterment of the masses.

In cases like this, it's possible that the government is getting richer and a few private individuals too, but the wealth doesn't fairly circulate among the masses. This kind of situation is happening in Nigeria now, yet the economy is positive economic-wise, but the masses are suffering and more people are being dropped into the level of poverty. However, the source has to be tackled through viable policies by the government which is a different ballgame and the situation will never stop the fact that GDP is part of a country's economy. One of the best approaches here is social intervention coupled with a positive trade balance where the nation is not import reliance but otherwise.

There is no conflicting of facts here, in simple words we cannot really consider it an country is prosperous just by looking at the GDP when the majority of resources and exports are catered by the wealthy elites who runs the government. Country might move forward and in terms of only numbers wherein still majority of it's citizens suffers. As you have given a good example of Nigeria just think where are we heading ? Everything is not number game and we cannot assume people are happy just because economy is good. This have to be redefined based on human happiness index. Try researching about Bhutan's GNH index and how they consider GNH over GDP.

[pooya87]

GDP at best shows size of the economy and nothing else. And that is only if it is truly "domestic" "product" because in some cases like US what they are counting as GDP is neither domestics nor product! In any case it is certain that GDP is not a representation of economic strength, quality of life, and stuff like that.

If you want to analyze the economy of a country you have to consider at least two dozen different things. For example you can't talk about Ukraine economy without considering that it is a country at war, or you can't analyze US economy without considering how it is printing money out of thin air ($35 trillion debt) and sells that debt to other countries exporting its inflation abroad!

[naikturun]

Maybe that's what the world measures for a country, if their GDP is high then they are declared a prosperous and prosperous country, even though what you say is true, some countries pay expensive rent and food every day, but the salaries they earn are also large.

[franky1]

because the formulae of GDP includes government spending they do not realise the funds of that spending can be stimulus debt(money printing)
consumption is also based on consumer spending which we all know is also debt included (credit cards and mortgages)

GDP = Consumption + Investment + Government Spending + Net Exports

but as i hinted at in last post. the bigger problem is, when they divide it up per person(capita) it then sets a FALSE vision of how much people can afford and retailers, real estate, and industry then "recommended retail price" their goods services and property based on a % of that amount

[arallmuus]

in simple words we cannot really consider it an country is prosperous just by looking at the GDP

Prosperous? probably not but if you use the word growing economy then yes

when the majority of resources and exports are catered by the wealthy elites who runs the government. Country might move forward and in terms of only numbers wherein still majority of it's citizens suffers. As you have given a good example of Nigeria just think where are we heading ? Everything is not number game and we cannot assume people are happy just because economy is good.

The fact is that all those exports were done mostly by the top companies in the respective countries but an increasing GDP means that the economy sector is growing as well because those numbers are not coming out magically thus there 'should' be alot more development taxes for the countries. Higher taxes means those countries would be able to build alot more things to improve the way of the life for the citizens

Unless of course if a country is govern by one of the most corrupted government then those GDP means literally nothing

[Bananington]

As the name GDP stands, it hopes to represent the gross domestic product periodically. It doesn't quite say if the country is rich or not, but it such provides a good scope and insight into what should be expected when considering investment in any sector of the economy..
Net gross domestic product (ion)  on the other hand is an annual representation of the sum GDP for the duration requested.

[icalical]

Tho I agree that most countries with highest GDP don't have more advance society than the other with lowest GDP, but I still think that GDP can be used to judge how much has the countries' economic is growing. The keyword is growing, because the economic is still growing it hasn't reach the peak point, and the higher the economic level the harder it gets to grow just like other thing, so it's easier for lower economic to have high GDP, compared to countries that already has high level economy.

[Casdinyard]

Do we really consider economy by GDP ? My answer would be no, If you look at world's largest economies their foods are slow poison and every single thing is expensive compared to some under developed nations. I had chance to see some Central Asian landlocked nations and was really surprised to that they organic foods and there are no adulteration unlike our chemically processed food which we consume and the best part is that they have their own house's and a backyard garden where they grow their own fruits and vegetable for consumption wherein on the other hand our living space has been squeezing as we develop further but guess what our GDP is increasing, But all the profit goes to the big capitalists who are on top of everything. 

GDP doesn't represent the citizens growth of that particular nation when the average working class people are paying exorbitant price for rent and food wherein there are countries where people are living peaceful countryside life paying less than 1/10th of what we pay for food.

There are pros and cons of these nations which I am referring to but I thought of highlighting the basic necessities and how it's been robbed from us in the developed nations in the name of growth and higher GDP has nothing to do with growth or happiness of people which is often misunderstood. Because there is no economy which has nothing to do with people of that nation.

Cause GDP is not representative of the nation's individual earning capability. Just take India for example, they have a pretty alright GDP but they are pretty much still on the rural-based economy with a lot of their citizens in the considerable poverty line. Does that mean that India is dying economy-wise? Nope. In fact it states that they are doing quite fine. But is their GDP indicative of their progress as a country? Nope, we have other factors for that.

The only mistake you made is mistaking GDP for the Growth Index of a country. Don't worry, it happens to the best of us. For the meantime, try learning more about the ins and outs of the world economy and their terminologies, might wanna look into some economics books along the way too.

[EarnOnVictor]

You are just conflicting facts, maybe you should go back to your studies of the economy and draw the right facts once again as aggression or personal belief will solve nothing. The GDP is a major part of the economy and it entails a whole lot things to butress this fact. All the outputs of the masses and government in the country, the purchases of goods and services and many more contribute to the GDP of a nation. I wonder why such won't contribute to the growth of the economy in your own dictionary. What I believe you are trying to establish is that the country might be moving forward in the economy, in which GDP contributes, yet the masses are suffering, inflation going towards the roof. But these are separate economic reviews where some policies need to be adjusted for the betterment of the masses.

In cases like this, it's possible that the government is getting richer and a few private individuals too, but the wealth doesn't fairly circulate among the masses. This kind of situation is happening in Nigeria now, yet the economy is positive economic-wise, but the masses are suffering and more people are being dropped into the level of poverty. However, the source has to be tackled through viable policies by the government which is a different ballgame and the situation will never stop the fact that GDP is part of a country's economy. One of the best approaches here is social intervention coupled with a positive trade balance where the nation is not import reliance but otherwise.

There is no conflicting of facts here, in simple words we cannot really consider it an country is prosperous just by looking at the GDP when the majority of resources and exports are catered by the wealthy elites who runs the government. Country might move forward and in terms of only numbers wherein still majority of it's citizens suffers. As you have given a good example of Nigeria just think where are we heading ? Everything is not number game and we cannot assume people are happy just because economy is good. This have to be redefined based on human happiness index. Try researching about Bhutan's GNH index and how they consider GNH over GDP.

I quite understand your plight and the Gross National Happiness you are talking about, in fact, a less-rich country could be happier than the richer country and this depends on many factors which includes money and the ease of getting the money. However, we can't use this to entirely remove the principle of economics which drives an economy itself, we can never remove the fact that the GDP is not a yardstick that contributes to the economy of a nation. GDP can never be underestimated here, and a major contributor for that matter, and it will be so nice that you do not entirely link happiness with richness and how progressive a country is, there are a lot that contribute to happiness, not money alone nor the economy.

Mind you, in those countries that are doing well, it's not the government that is doing the majority of things for them but the ability of the private citizens to think and create wealth for themselves (creativity and willingness) and also get to create businesses where a lot of people could also be employed. If this is happening in the opposite in any country, it's the responsibility of the citizens and government to change the narrative, but people often believe that the government should do everything for them. And if the GDP is progressive and people suffer, then it's highly possible that people are not doing enough and still believe the government must do more because I've seen cases where the government tried its best but it didn't work much.

With this mindset, citizens reduce the productivity and efficiency of the human resources in the country which is part of what drives the economy. Everyone wants cheap money and this often sets them even back more.

[davis196]

I agree that nominal GDP isn't the one and only perfect method to measure the economy of every country, the problem is that there's no better way to measure an economy. The problem with nominal GDP is that it measures the economy based on prices. The higher the prices of everything, the better(including salaries, which represent labor prices). Higher real estate prices should mean that the real estate owners are rich, but in reality the expensive houses and apartments are one of big problems of the capitalist consumerist society.
I agree that everything is very expensive in the highly developed countries, but there's no other way around. If everything was cheap, the companies won't have enough revenue to pay big salaries, therefore the salaries would have to be lower as well.