Why are we so fascinated by GDP? And has lost its significance?
The world is fascinated by GDP and its growth. Countries and administrations are frequently judged by how much they have of it. A recent IMF study concluded that China had already overtaken US, when adjusted for purchasing power parity (PPP), many years earlier than expected.
In absolute terms, US economy ($17.4T) is still larger than China's ($10.3T) however, since things are cheaper (for a same basket of goods) in China , when adjusted for PPP, China catapults itself to $17.6T overtaking the US, which has held the lead for the last 142 years. Using the same adjustment, India, Japan and Germany occupy the next 3 spots.
Why are we so fascinated by GDP? And has lost its significance?The world is fascinated by GDP and its growth. Countries and administrations are frequently judged by how much they have of it. A recent IMF study concluded that China had already overtaken US, when adjusted for purchasing power parity (PPP), many years earlier than expected.In absolute terms, US economy ($17.4T) is still larger than China's ($10.3T) however, since things are cheaper (for a same basket of goods) in China , when adjusted for PPP, China catapults itself to $17.6T overtaking the US, which has held the lead for the last 142 years. Using the same adjustment, India, Japan and Germany occupy the next 3 spots.
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