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GDP or GDP per capita?



SebastianThreads: 6
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Joined: Feb 16, 10
 Feb 18, 10, 01:41    #1
hey guys. I'm no economist. But I was reading that Poland has the 15th largest GDP in the world, or something like that. But their GDP per capita is low, only like 16,000. What is more accurate, GDP or GDP per capita? Just wondering.


skysoulmateThreads: 41
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Joined: Jan 10, 10
Edited by: skysoulmate  Feb 18, 10, 12:39    #2
Both measures are important but look at different aspects. Let's say you have a family of 4 with both parents working and the 2 kids in school. The parents make a total of $100k a year. That's the total "GDP" for the family. However since there are 4 "citizens" in that family their GDP per capita is only $25k per year.

GDP per capita shows more of each individual's wealth wheras the total GDP shows a country's combined wealth. I'm generalizing but it'll make it easier to understand.

You might also look into Purchasing Power Parity (PPP) as a comparison.

"PPP basis is arguably more useful when comparing differences in living standards on the whole between nations because PPP takes into account the relative cost of living and the inflation rates of different countries, rather than just a nominal gross domestic product (GDP) comparison."
(source wikipidia).

List of countries by GDP (PPP)
http://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

Poland is about 20 here.


skysoulmateThreads: 41
Posts: 3,039
Joined: Jan 10, 10
Edited by: skysoulmate  Feb 18, 10, 13:05    #3
GDP (PPP) 2008 estimate
 -  Total $668.551 billion[3] (21st)
 -  Per capita $17,536[3] (50th)
GDP (nominal) 2008 estimate
 -  Total $527.866 billion[3] (18th)
 -  Per capita $13,846[3] (50th)

Source: http://en.m.wikipedia.org/wiki/Poland?wasRedirected=true

GDP and GDP per capita comparisons might be skewed as $17k a year is not much in the US and the UK but a whole lot of money in Zimbabwe. PPP is supposed to correct it somewhat but it's far from perfect.


convexThreads: 47
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Edited by: convex  Feb 18, 10, 13:11    #4
What are you looking for? If you want to compare the financial situation of average people in different countries, you're best bet is to take a look at median incomes, the cost of a local basket of goods, including real estate, and the unemployment rate.

GDP is a sham :)

If it's quality of life you're looking for, HDI is a good indicator.

OECD has stats on discretionary income too




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