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GDP and GDP per capita


GDP has become a common notion in understanding a country's economic growth. Also, there are certain measuring factions within GDP itself, nominal (constant prices, not adjusted for inflation) and real (current prices, adjusted for inflation). Does GDP in the actual representation of the economic prosperity of the citizens? We will try to look at this with one more level of measure.

 GDP per capita, which is calculated by dividing the GDP by the population, might indicate the economic prosperity of the citizens but still not accurate. Let us see an illustration for certain countries, considering the GDP, population and GDP per capita adjusted for international prices in real terms to provide a level playing field given the different living conditions and prices in different countries. Let us see this example for the countries USA, France, China, Japan and India are as follows in USD. 

 Country  GDP (PPP) (in million)  Population (in Cr) GDP per capita (PPP)

USA               20,936,600              32.82      63,453
France             31,15,307                6.71      46,227
China             24,273,360            139.77     17,312
Japan              53,28,033               12.63     42,917
India                89,07,028             136.64       6,454

Source: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?view=map


If we see this illustration the details present us a clear picture. For countries having a higher population, a higher GDP is needed for higher GDP per capita. It also leaves with another question what would be the Government, Foreign investment needed and how much natural resources would be exploited to accomplish a higher growth. 

Also at one more level, there is a higher inequality factor in many countries, for example in India, 1% of the population holds 42.5% of the wealth whereas the bottom 50% control only 2.8% of the wealth.

All these points pose various questions, but due to the complexity and growing global economic and political situations, countries are pushing for merely higher GDP growth, considering something is better than nothing. And only the shallow information is displayed in the media.

But there is always hope, there is only abundance and completeness in the universe, if we seek we shall get.


Disclaimer: The writer is just interpreting his views based on his limited purview about economics as social science, but trying to apply common sense into the scheme of things
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