GDP and You!

Gross domestic product (GDP) is the value of all final goods and services produced within a country.

The reason GDP matters is that it is directly correlated to a reduction in human suffering. Economic growth is the primary differentiating factor between a life lived in the US and a life lived in North Korea. Economic growth is the primary differentiating factor between a life lived in the 11th century and the 21st century. Economic growth has cured countless diseases which would have otherwise imbued countless lives with unimaginable suffering. Economic growth has prevented billions from dying of starvation. If governments will get out of its way, economic growth will eventually eliminate human suffering from the planet. Also, according to the most recent income/happiness study, the lower a person’s annual income falls below $75,000 a year, the unhappier he or she feels. But no matter how much more than $75,000 people make, they don’t report any greater degree of happiness. The strong correlation between happiness and GDP is illustrated below.

Graph Showing Wealthier Countries Exhibit Greater Life Satisfaction

Graph Source: http://www.nytimes.com/2008/04/16/business/16leonhardt.html

Filip Spagnoli identifies an array of positive and negative correlations between per capita GDP and the following metrics:

1. Corruption
2. Poverty
3. The Resource Curse
4. Economic Freedom
5. Rule Of Law
6. Democracy
7. Infant Mortality Rates
8. Life Expectancy
9. Education
10. The Environment
11. Happiness
12. Unemployment
13. Land Distribution
14. Charity
15. Individualism
16. Inequality
17. Election Outcomes
18. Civil War
19. Belief In The Theory Of Evolution
20. Crime
21. World Population
22. Fertility Rates
23. Taxation
24. Spending On Christmas Gifts
25. Casual Sex
26. Equality Before The Law
27. CO2 Emissions
28. Campaign Spending
29. Tax Revenue
30. Urbanization
31. Military Spending
32. Government Spending
33. Innovation
34. Religion
35. Social Spending
36. Competitiveness
37. IQ
38. Adult Literacy Rates
39. Unionization
40. Employment Share Of Agriculture
41. Stock Prices
42. The Salary Of Political Leaders
43. Risk Tolerance

 

 

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©2017 Mike P. Sinn

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