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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 (240)
kasunkt (5 days 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 (6 days 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.
John Aaron (18 days ago)
Adjust Income Inequality
skeletorrobo (1 month ago)
Thanks for the explanation.
vinayak kanadal (1 month ago)
Nice sir
Conrad Strydom (1 month ago)
Great video, you explain the concepts so well it's incredibly easy to grasp.
junejuly532 (1 month ago)
You are better than the text books i read. Keep it up.
junejuly532 (1 month ago)
You are better than the text books i read. Keep it up.
Bernard Chu (1 month ago)
thank you very interesting sir
Blue Hippo (2 months ago)
Watch this video in 1.25 speed :/
OpenMinded30 (2 months ago)
The vids are very rich and nicely put. Plain simple and crystal clear. Many thx...
Ivan A Melnikov (2 months ago)
great video. thank you. are you doing more?
Deniz Denizer (2 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
ADC ADC (2 months ago)
Do you have lectures for ISLM?
ADC ADC (2 months ago)
Love these videos
krishna chaitanya (2 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 (2 months ago)
Excellent work done presentation and style of concept delivery is awesome
Jorge Calderon (2 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 (2 months ago)
Very useful
Pradeep Kumar (3 months ago)
Very good information!! Thank you!! Subscribed!!
Chris Boaden (3 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 (3 months ago)
helpful, carry on
Bzucoslav (3 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 (3 months ago)
i love you very much (4 months ago)
These videos are awesome thank you very much for the good work guys
jeffrey honig (4 months ago)
A truly fair and realistic assessment of a nation's national per capita income would concentrate specifically upon the incomes of the most of its salaried workers in professions that require a bachelor's or higher degree, or a HS diploma and a hardcore skill, but do not require a professional license.  Everything else is just window-dressing.
Abhijeet Pal (4 months ago)
great job
ankit kumar (5 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 (5 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 (5 months ago)
thanks for these useful videos
Elvis Hunter (5 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 (5 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 (5 months ago)
Great videos with simple explanation.
Pelagia Shorwa (6 months ago)
much obliged .....this is so helpful .......carry on
Nirman Kodithuwakku (6 months ago)
great work.. thanks.
Jakub Godlewski (6 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 (7 months 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 (7 months 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 (7 months ago)
what about median gdp per capita rather than average?
Samrawit Tekeste Kahsay (7 months ago)
Thanks, 🙏🏾very interesting👌🏾
Ricardo Murillo (7 months 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.
Tarang Sharma (7 months ago)
I really lke your channel. it syncs with my level of understanding quite well.
V H (7 months ago)
Excellent presentations!
MITUL GOYANI (8 months ago)
Extremely well organized
Arnab Ghosh (8 months 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 (8 months 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 (8 months ago)
Your guys are doing great!keep it up
Deepak Verma (8 months 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 (8 months ago)
very clearly explained! Thanks
aloke bachhar (8 months 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 (8 months 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 (8 months ago)
Great video
satyam tripathi tripathi (9 months ago)
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 (9 months 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 (10 months ago)
Outstanding videos. Good explanation of GDP.
Affan Ahmad (10 months ago)
Excellent Videos Sir
Lucksika Choysong (10 months ago)
Great vdeos
aved aved (10 months ago)
What's to improve? This video is perfect.
Open learning (10 months 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 (10 months ago)
Superb sir.... Thanks for your info......
Amr Hassanien (10 months ago)
thank you very much really it is very helpful
naman rai (10 months ago)
brilliant video
Ovigwe Eguegu (10 months ago)
Great video
alok kumar (10 months ago)
Srinivas Rathod (10 months ago)
nice video and great explanation
Justin Sandolph (11 months ago)
Amazing it's good how it is
allenkkwong (11 months ago)
Very good video!! Thanks!
Anne Dalphin (11 months ago)
Thank you!
Ambreesh mishra (11 months ago)
Excellent sir
zoe fofo (11 months ago)
That was very helpful. So from what I can understand both real GDP and GDP per capita doesn't define the wealth of a country unless it is redistributed back to the people equally
Econ4 Every1 (11 months ago)
_Nominal_ per-capita improvements in income of the poor don't really tell us if the poor (the bottom 20%) are actually better off. Wouldn't we need to see _real_ per-capita income? In other words, just because income increases per-capita doesn't mean that the money they earn will buy the things they need. Perhaps using a measure like Purchasing Power Parity or something similar to it to really understand how much better the poor are doing as per-capita income rises? What if nominal per-capita income rises, but free time and disposable income decline? How might we measure for that? Cheers E4E1
Guilherme Z (10 months ago)
I'm sorry... I think I didn't explain well. GDP growth is calculated in real terms. When you are comparing countries or the same country on a time series you fix the currency in any given year.
Guilherme Z (10 months ago)
GDP and GDP per capita are already calculated in real terms.
Sandhya Basare (11 months ago)
Hussain Mani (1 year ago)
Hi professor these are the best videos, you are a True professor who teaches the hardest theories in simplest way.
pushparaj , (1 year ago)
Very interesting all of urs stuff and easy to understand
Anthony Wilson (1 year ago)
i disagree sir....rich countries dont have happier people
Ha Chun Keat (1 year ago)
Thank you for this video It is easy to learn about economics
Anirudh Koushik (1 year ago)
watching this a couple of years late from release but one of the best material for gdp!! I was struggling to find a decent web series about the same and accidentally stumbled upon this and boy was it worth it!! Thanks a lot for making this video series!!
Sergey Erlih (1 year ago)
some of the expressions in the videos are a little bit misleading because the inferences from the statistical data are overgeneralized. The things about HDI for example... What about overachievers and underachievers????
Angel Dela Cruz (1 year ago)
Sergey Erlih check Legatum Prosperity Index! :3
Saúl Mendoza (1 year ago)
Awesome! Super good explained
sanam gurung (1 year ago)
thanks for the best info
too simple get into more complex topics
Ashley Robinson (1 year ago)
i really love these videos , they have been very helpful
anand kumar (1 year ago)
Good video
Varandeep Panesar (1 year ago)
Felicitous : The word defines it all.
Amar Jadhav (1 year ago)
one of the best video i have ever seen... Thank you very much for your efforts... Respect :)
suresh gupta (1 year ago)
Wow. Nice analysis. I really likes your vudeos
Rokas Kriščiūnas (1 year ago)
How happiness is measured?
Guilherme Z (10 months ago)
They ask the people in the streets "On a scale of 0 to 10, how do you define your overall life satisfaction and happiness?"
Er. Vaibhav Agarwal (1 year ago)
Absolutely fantastic, great effort, I learnt everything in a better way with a unique and different explanation. It will help me to teach students with much broader perspective.
Khaled Wahdan (1 year ago)
Thanks for the information. I wonder if you can give a book or an academic article reported what said. I want to cite this in my thesis.
Safir Semon (1 year ago)
Sir, would that you could make a tutorial about GDP deflator... that would be useful
Great idea and yes we should do that! Thanks. -Roman
Winson Tam (1 year ago)
more useful than my econ teacher, thx a lot
Venkatesh Ch (1 year ago)
Gdp per capita for pakistan is 1460$ not 4000$. Correct me if i'm wrong.
Guilherme Z (10 months ago)
he used the PPP methodology. It is better for international comparisons.
Zahid Khan (1 year ago)
Venkatesh Ch 1629$ you r wrong
Some prince in Nigeria still owes me a million dollars plus the one thousands dollars I sent him through Western Union. 10 years later I still didn't get my one million dollars!
Sir platinium (2 months ago)
I know this is just a joke but my dad legit got over a million dollars stolen from him...by not a prince, but the nigerian government itself...12 years on my side...
Tricky Situation (2 months ago)
uzoma ihebom your lack of grey matter is astonishing
Joey the gimmick (3 months ago)
+Type 2 unset diabeetus LMAO you must be a dumbass .
Type 2 unset diabeetus (3 months ago)
Nigeria is poor shitty country.. There are No rich prince
uzoma ihebom (7 months ago)
You're such an idiot, greedy fool. Besides, aint you homeless?
Nicholas Gillan (1 year ago)
Great clip. well explained. i'm concerned however about the happiness graft. The facts are gathered using wealth to and possessions to measure happiness. i believe that lesser fortunate people are happier and they don't even know it.
Жан Трушев (1 year ago)
If countries are very different like Egypt and USA we can find a strong correlation, but when we compare only developed countries... USA 57,436$ Spain - 36,416$ Life expectancy USA - 79.3 Spain - 82.8()
Ally Nunez (1 year ago)
zoom out
Joy Channing (1 year ago)
Goddamn I love this man!
Winict Maximus Cosmo (1 year ago)
very easy to follow and understand ur explanation n video .. thanks
Mohd Fakhree (1 year ago)
awesome video.. tq

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