Monday

 

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 8 The Data of Macroeconomics
Chapter 23 of 36 Measuring A Nation’s Income
Section 15 of 15
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Table 3 shows for twelve major countries in year 2005 Gross Domestic Product (GDP) per person and three other measures of quality of life.
Table 3a shows 2024updated information.
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Chapter conclusion.
Examining international data is a way to gauge usefulness of GDP as a measure of economic well-being.
If a large GDP leads to a higher standard of living GDP would be strongly correlated with various quality of life measures.
Table 3 lists twelve large countries ranked in order of GDP per person, showing
· life expectancy, expected life span at birth
· literacy, percentage of the adult population who can read
· internet usage, percentage of the population that regularly uses the Internet
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In rich countries
· people can expect to live to about 80
· almost everyone can read
· a half to two-thirds of everyone uses the internet
In poor countries:
· people typically die 10 to 20 years earlier
· a substantial amount of the population is illiterate
· internet usage is much less
Data about other quality of life aspects tell a similar story.
Countries with low GDP per person tend to have
· more infants with low birth weight
· higher rates of infant mortality
· higher rates of maternal mortality
· higher rates of child malnutrition
· less access to safe drinking water
· fewer televisions and telephones
· fewer paved roads and households with electricity
· fewer school-age children in school
International data show conclusively a nation's GDP per person is closely associated with its citizens' standard of living.
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Measurement of total income of a nation is only a starting point.
The goal of much of macroeconomics is to identify the long-run and short-run determinants of a nation's growth and size of gross domestic product.
Some questions macroeconomists try to answer
· why is United States and Japan GDP per person higher than in India and Nigeria?
· what can governments of poor countries do to promote rapid GDP growth?
· why does U.S. GDP rise in some years and fall in others?
· what can U.S. policymakers do to reduce the severity of these GDP fluctuations?
Economists who study GDP and economic policymakers need data on which to base their judgments and decisions.
Quantifying behavior of and changes in the economy with statistics such as GDP is the first step of developing a science of macroeconomics.
(End of chapter 23 of 36)
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Congratulations! 64%, 23 of 36 chapters, of way to becoming a competent economist.