There is a strange paradox in the interpretation of
GDP. Hardly anyone would argue explicitly that
GDP measures economic welfare, but everyone is
using it in a way as if it did. Economists and
statisticians would probably agree that GDP measures the kind of economic activity which is allocated
by markets. Nevertheless, as a glance in any
newspaper will assure us, in economic policy it still
plays the key role and if we want to compare two
countries, we will immediately rely on per-capita
GDP.