Economics study group
A group dedicated to asking and discussing questions about economic literature
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GDP vs “Real GDP” (vs “Really Real GDP”)
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GDP vs “Real GDP” (vs “Really Real GDP”)
It appears that during this period of higher inflation, the concept of “Real GDP” is going mainstream, as people all over the world realise that regular GDP is inadequate as a measure of productivity without inflation factored in.
As a total beginner in economics, I also find it crazy to look into GDP as a measure of wealth and discover that nations like Switzerland or Singapore – which produce NOTHING – can be considered VERY WEALTHY, only because they create a lot of credit or provide financial services. And by contrast, nations which have huge reserves of precious metals, minerals or oil in the ground are considered not wealthy because those resources are still in the ground or not circulating.
Credit-based economies just seem very upside down to me. I am keen to learn more. So I’m hoping to open this discussion up to others. What is the correct way to measure a nation’s wealth?
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