danger of traditional economic productivity measures of countries
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The danger of traditional economic productivity measures of countries.
Economists are fond of talking about the Gross Domestic Product (GDP) as a measure of the level of economic activity in a particular country. The GDP expresses in terms of dollares the sum of all of the transactions in the economy usually over a quarter. A common use of the measure is to examine changes year-on-year and quarter by quarter. When GDP rises quarter by quarter, the economy is said to be growing. When GDP falls during 2 consecutive quarters or more, the economy is said to be in recession.
However, it is of little use to compare the GDP of the USA to the GDP of Chile, for example. The USA has twenty times the population of Chile, and so you would expect that its GDP should be at least 20 times as large as Chiles. Economists get around this issue by talking about GDP per capita, in other words the Gross Domestic Product divided by the number of people living in the country. The is the traditional productivity measure that economists use to compare one country with another...