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Real GDP Per Capita and the Standard of Living

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They say what matters most in life are the things money can’t buy. So far, we’ve been paying attention to a figure that’s intimately linked to the things money can buy. That figure is GDP, both nominal, and real. But before you write off GDP as strictly a measure of wealth, here’s something to think about. Increases in real GDP per capita also correlate to improvements in those things money can’t buy. Health. Happiness. Education. What this means is, as real GDP per capita rises, a country also tends to get related benefits. As the figure increases, people’s longevity tends to march upward along with it. Citizens tend to be better educated. Over time, growth in real GDP per capita also correlates to an increase in income for the country’s poorest citizens. But before you think of GDP per capita as a panacea for measuring human progress, here’s a caveat. GDP per capita, while useful, is not a perfect measure. For example: GDP per capita is roughly the same in Nigeria, Pakistan, and Honduras. As such, you might think the three countries have about the same standard of living. But, a much larger portion of Nigeria's population lives on less than $2/day than the other two countries. This isn’t a question of income, but of income distribution—a matter GDP per capita can’t fully address. In a way, real GDP per capita is like a thermometer reading—it gives a quick look at temperature, but it doesn’t tell us everything. It’s far from the end-all, be-all of measuring our state of well-being. Still, it’s worth understanding how GDP per capita correlates to many of the other things we care about: our health, our happiness, and our education. So join us in this video, as we work to understand how GDP per capita helps us measure a country’s standard of living. As we said: it's not a perfect measure, but it is a useful one. Macroeconomics Course: http://bit.ly/1R1PL5x Ask a question about the video: http://bit.ly/1WJcJ5w Next video: http://bit.ly/1S1CxuA Help us caption & translate this video! http://amara.org/v/H04s/
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Text Comments (275)
upstreamer (1 day ago)
Can be the GDP manipulated?
阿阮Aaron (16 days ago)
Great! I learned objective knowledge. It's not propaganda.
PRAGATI MESHRAM (18 days ago)
Thankyou sir.
Cassel Technologies (25 days ago)
that is because of corruption and injustice by governments, I come from India were there is lot of Injustice and fake laws, rapid growth in technology, overpopulation and unstable jobs where here also it is the same like Pakistan or Nigeria, we are big internet users and many people brag of how great India is, so many westerner think we are a great country, the economy is big but GDP per capita is poor, many of my friends from Australia who found a way to immigrate from India and have a much better lifestyle there tell me the same "India's doing very good mate" I ask them why did you go away come back and live India lol.......
Alec van (1 month ago)
love the vids
Asghar Khan (1 month ago)
Thank you very much for the video, you're doing great. Its very informative and made it so easy to understand the economy.
Deborah Susaiyappan (1 month ago)
👍very nice
David Johnson (1 month ago)
When these videos go to emerging markets or communist countries it just throws me off, their circumstances are totally different, even if they started to manage to grow they will get hit by civil war and sanctions.
Cosmo John (1 month ago)
Ask yourselves : 1. GDP can be faked or impossible to be faked? 2. IMF does not know which country faked the gdp because IMF cannot audit. 3. So, do you wonder what is the accuracy of world GDP forecasts by IMF? 4. Have you ever wondered why IMF play along with this numbers game?
WASSCE Tutorials (1 month ago)
Come on dude; we are just here to learn! Don't poison people with your conspiracies!!
M. Heshmatpour (1 month ago)
It is a complete and easy to understand explanation.
Ranja Virtaila (2 months ago)
These videos are very good for people whose English is 2nd language. I really appreciate slow and very understandable speaking.
Engineering Girlfriend (2 months ago)
you are best sir
james heseltine (2 months ago)
British people live longer than Germans but their gdp per capita is less than Germany......
I am THE ZUCC (2 months ago)
*Snaps out of focus * Nothing personal kid
Nathan Cook (2 months ago)
Slide on your block then I bleed it
Linda Scoon (2 months ago)
Economists graph everything, even happiness. Where is the love graph
Manar sh.s (2 months ago)
Thank you very uesful keep it up 👍👍👍👍👍👍🤩🤩🤩🤩🤩
Michael Tardaguila (3 months ago)
Thank you very much for teaching ECONOMICS. It let me saw how our government officials and local economist "played" with prices and production. Made me realize Nominal and Real GDP happenning this time in my country. I recall (and will be remembered) why similar Real GDP of other countries reveals how rich portrays as changers against the poor masses. Please do not consider my ideas offensive (againsts my country, as they are corrupt). These facts will be shouldered by my own. This is very helpful! Best regards.
Hakem Ali (3 months ago)
If you use some graphic programs such as After Affect, the video will be excellent.
Business Advisors (3 months ago)
Thanks alot, this is very helpful
rajat sharma (3 months ago)
Your videos are really good. Educational, keep doing the good work and also start making country-specific videos as well.
Thank you for your comment! We have some country-specific playlists. India: https://www.youtube.com/playlist?list=PL-uRhZ_p-BM6qwTvoo09a3ZB2WuZNQtr8 China: https://www.youtube.com/playlist?list=PL-uRhZ_p-BM4vSTK6gU6sLqA7lPDbZIe5 and more You can see these on our channel page. -Roman
Dangis Congrataway (4 months ago)
Thank you, my macro economics course starts soon and I understand the concepts well thanks to these videos.
Bhavesh Dangi (4 months ago)
Great video. Subscribed !
T (4 months ago)
Good video, however it's the governments that don't want to invest in research to find new international standards to quantify growth, they are happy to use one very old indicator. Venture capitalist Nick Hanauer and guest academics explain the real situation in the pitchfork economics podcast. It's as if they don't want the layman to easily discern what the real situation is so they can say overall growth continues, if we change anything (like add regulations to the free market) the whole system would collapse. But why shouldn't the UN introduce a process and definition that is more complex and more defined? It would benefit the greatest number of people by letting us know the true impact our government policy makers have had. The video is fine until he said "Growth in GDP per Capita USUALLY does indicate growth in everyone's income over time, including the incomes of the very poor". Such an ambiguous and misleading sentence. The pictograph isn't even fully annotated, anyway you would expect it to grow slowly over time. It would have grown exponentially faster if the markets were regulated to ensure inequality wasn't increasing and predominantly benefiting the corporations and the elite.
Peace seeker (4 months ago)
Thank you Mr. Alex for this enlightening video. Thank you very very very and very much!!
sub.scribe 01 (4 months ago)
Great video ! 👍
khairi Ibrahim (4 months ago)
You do great, thank you
D. (4 months ago)
Hi, average Joe here. Is it possible to derive with a more objective value of "GDP per Capita" by correlating it with an added variable called "Distribution of Wealth index"? Performing the most logically suitable math operation between both of 2 values will result in a more objective "GDP per Citizen" value - which is more useful for an average Joe. What did i miss, or maybe reinvented an already existing thing? I know there exists 2 more values of buying power, one is correlated with outside market, and one with inland market. These values are also pretty telling about the standards of living, though are a bit tricky to understand.
Hasran Aslan (4 months ago)
Breaf and clear explanation
Prashant Chavan (4 months ago)
More animation
Muhammad Bin Shahzad (4 months ago)
Very well done indeed. Thank you. :)
모모 (4 months ago)
The way you explained is much better than my professor. Now I have a better understanding of GDP. Thanks a million!!
Jay Double Gee (5 months ago)
So in other words don't be poor or you'll never get out of poverty. Got it.
kasunkt (5 months ago)
very white perception and very us biased they dont take other oecd countries against US because thats the best example .but its kinda hurt US EGO.
Nadir Khawaja (5 months ago)
Growth in GDP and GDP per Capita doesn't not necessarily mean there will be growth for all incomes over time. Its entirely possible for new wealth generated to be concentrated in the hands of a much smaller class.
Aaron Castillo (5 months ago)
Adjust Income Inequality
skeletorrobo (6 months ago)
Thanks for the explanation.
vinayak kanadal (6 months ago)
Nice sir
Conrad Strydom (6 months ago)
Great video, you explain the concepts so well it's incredibly easy to grasp.
junejuly532 (6 months ago)
You are better than the text books i read. Keep it up.
junejuly532 (6 months ago)
You are better than the text books i read. Keep it up.
Bernard Chu (7 months ago)
thank you very interesting sir
Blue Hippo (7 months ago)
Watch this video in 1.25 speed :/
WASSCE Tutorials (1 month ago)
Why would anyone do that??
OpenMinded30 (7 months ago)
The vids are very rich and nicely put. Plain simple and crystal clear. Many thx...
Ivan A Melnikov (7 months ago)
great video. thank you. are you doing more?
Deniz Denizer (7 months ago)
You're doing good, very good I think. Your video's are very informative. I'm learning very much things I never knew so well before. Your presentation and axplenation style are very understandible. It's fantastic that you make and publish these good video's. You are rendering a good international service by that. I hope you will continue producing and publishing this kind of video's. Thank you very very much.
Thank you! -Roman
Arti Chaure (7 months ago)
Do you have lectures for ISLM?
Arti Chaure (7 months ago)
Love these videos
krishna chaitanya (7 months ago)
There ain't any channel in the youtube that can explain the economics as interesting as you do.Thanks for all your quality videos.👍
Adnan Khan (8 months ago)
Excellent work done presentation and style of concept delivery is awesome
Jorge Calderon (8 months ago)
So your chart shows that people in Venezuela are as happy as people in Norway, Ireland and Costa Rica and happier than people in the US, Chile, Panama and Peru??? You've got to be kidding me.
Ahmed Seif (8 months ago)
Very useful
Pradeep Kumar (8 months ago)
Very good information!! Thank you!! Subscribed!!
Chris Boaden (8 months ago)
I have a question. If the poorest in a country with a growing GDP also benefit, does this mean trickle down economics does work?
Keith Rollins (8 months ago)
helpful, carry on
Bzucoslav (8 months ago)
3:00 cca - that is why you should use median not average
Your videos explain technical knowledge to dummies who don't know a damn about business like me. So I'd say you're doing well. 👍
TRXPLMRSBJ 19 (9 months ago)
YOUR VIDEOS SAVE MY LIFE. GHAD WHY DO WE NEED SCHOOL ANYWAYS? AHAHAH THANK YOU FOR MAKING THESE!
i love you very much (9 months ago)
These videos are awesome thank you very much for the good work guys
Abhijeet Pal (9 months ago)
great job
ankit kumar (10 months ago)
today i watched your videos and now, I think I have no need to take classes in school. Thanks for making such videos.
Shah Rukh Qasim (10 months ago)
You didn't put correct GDP per capita for Pakistan. Its the PPP one. Real GDP per capita as of 2018 is around $1600.
Haidy Hemdan (10 months ago)
thanks for these useful videos
Cassel Technologies (11 months ago)
lessen population to improve GDP per capita, China had a strict one child policy for a long time and their GDP per capita grew, countries with a less population and more money to match the population which is high GDP per capita are the best places in the world which means wage are much higher and less competition for money. jobs, resources and space people have a easier life and quality lifestyle and the government also stays good with lesser people to support and maintain a good infrastructure, pension plans for citizen and cope with other government responsibility and these countries can also exploit other countries by running their companies companies, investments and extracting cheap labor in the form of outsourced work.......
sarthak z (11 months ago)
Why adjusted per capita income is not calculated. Gdp minus the top rich rich people gdp. Then the remaining gdp divided by population.
Sadham Hussain (11 months ago)
Great videos with simple explanation.
Pelagia Shorwa (11 months ago)
much obliged .....this is so helpful .......carry on
Nirman Kodithuwakku (11 months ago)
great work.. thanks.
Jakub Godlewski (11 months ago)
Nice video. i've got a question ( it was on my exam) . " explain why the sentence is wrong - " high level of real GDP per capita is always positive thing.". THanks for an answer. <:
Vvk M (1 year ago)
Wow sir...I was already hating economics my whole lyf...bt ur teachings made it a more loving subject
Great to hear! -Roman
Mr. Spook (1 year ago)
I just started learning macroeconomics out of interest and curiosity, and I'm already in love with your videos. Subscribed!
Welcome to the wonderful world of econ! Let us know how it goes! -Roman
MetraMan09 (1 year ago)
what about median gdp per capita rather than average?
Thanks, 🙏🏾very interesting👌🏾
Ricardo Murillo (1 year ago)
NOPE. It is a mediocre indicator that must be replaced for the new generation. How about pollution and environmental stress? Great thinkers have said that those who believe on everlasting GDP growth for happiness are crazy. We are so obsessed with GDP growth that we are irreversably damaging the planet over it. Side note.. you must account for debt levels of a country when you look at gdp as well as distribution. You can grow at the expense of your kids. Barbaric.
Zinker Well (1 year ago)
I really lke your channel. it syncs with my level of understanding quite well.
V H (1 year ago)
Excellent presentations!
MITUL GOYANI (1 year ago)
Extremely well organized
Arnab Ghosh (1 year ago)
But real income of the people doesn't grow over growth of real GDP per capita always as the real income suggest the growth including the inflation and thus the percentage of poor and rich remains the same..
Truth Matters (1 year ago)
GDP is nothing to do with the income level. YOu are confused. GDP per capital is average production amount, not the average income.
Faiz Aiman (1 year ago)
Your guys are doing great!keep it up
Deepak Verma (1 year ago)
Its totally.. wrong Concept It's mean Japan is much more happy than tibitians It mean Japanese business are more happy than tibitian monk But.. Suicide and depression is more in Japan
wow (1 year ago)
very clearly explained! Thanks
aloke bachhar (1 year ago)
Thank you ,sir.I love all your videos.please carry on for us.Your university has taken a giant step to spread free education among all the people and you are doing a great job.So thank you once again.
Abhishek Ghegade (1 year ago)
Pakistani wealth is unevenly distributed after Nigeria. So true. It's a beggar country with such low per capita income and almost pathetic GDP. It begs hefty dollars from USA for development and then uses it for terrorism. Unemployment is highest in Pakistan. Pathans are forced to live in non urban, forest and barren area of Pakistan. Pakistan doesn't have access for clean drinking water and food. 1/3 rd of the Pakistan sleeps without eating food. Infrastructure is pathetic that you won't find sky scrapers, proper roads and even drainages. They don't work on their problems and often show fake stats to world. Even their science and history revolves around glorifying Islam. They get medical visa from India because there are no sufficient modern hospitals in Pakistan. Also, Pakistan doesn't even own water. Under Indus water treaty, India donates its water to Pakistan. Nearly, 40 million Pakistanis lack access to toilets. Farming is destroyed. Wealth is concentrated by corrupt politicians, terrorist organisation and military men with higher posts. This country even doesn't get proper electricity and imports it from India. They owe a heavy debt to USA and is now have become slave of communist China. Pakistan inflicts atrocities on Balochistan, Pakhtoons, sindhis. The dominant Punjabis Muslims are sharia oriented and have no human rights for Minorities in Pakistan.
Douglas W (1 year ago)
Great video
Videos are good but if u upload videos on core topics like macro theory of distribution,classical Theory Of employment then it will further enhance its productivity.
Gerald Louis de kock (1 year ago)
Very interesting How ever in-spit of the very poor having an increase in income the failure to measure this against product inflation still leaves the very poor in the same predicament / Eg bread costs $ 1.00 now and in three months later it costs $ 1.50 but the value of the Dollar decreases and the price of goods go up I now by less than what I did meaning that A poor person is still poor even if they did get an increase on income say 2% the inflation rate out stripes the increase and this can be clairlly see in most third worlds
James Gadsden III (1 year ago)
Outstanding videos. Good explanation of GDP.
Affan Ahmad (1 year ago)
Excellent Videos Sir
Lucksika Choysong (1 year ago)
Great vdeos
aved aved (1 year ago)
What's to improve? This video is perfect.
Open learning (1 year ago)
if u interested in economics check this out guys https://skylimit2017.wordpress.com/2018/03/07/bop-current-account-and-capital-account-macroeconomics/
Ramprasad (1 year ago)
Superb sir.... Thanks for your info......
Amr Hassanien (1 year ago)
thank you very much really it is very helpful
naman rai (1 year ago)
brilliant video
Ovigwe Eguegu (1 year ago)
Great video
alok kumar (1 year ago)
Great
Srinivas Rathod (1 year ago)
nice video and great explanation
Justin Sandolph (1 year ago)
Amazing it's good how it is
Allen (1 year ago)
Very good video!! Thanks!

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