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Originally Posted by GGG
It might be a useful statistic.
Directly correlating GDP to quality of life without demonstrating that link or discussing how immigration affects GDP per capita and any lags that it may cause makes it less useful.
https://www.worldometers.info/gdp/gdp-per-capita/
List of countries by gdp be per capita
Best quality of life
https://www.usnews.com/news/best-cou...uality-of-life
Now these aren’t definitive rankings but it really calls into question the GDP vs QOL thesis.
I’m not saying this isn’t a concern, I’m saying that article and and paper referenced were written to support an agenda rather than an analysis of what is actually happening |
Ireland is a good example. In 2015 their GDP (and GDP per capita) grew by over 25%. Was it due to an economic miracle where everyone got 25% richer? No, it was because Apple shifted the domicile of their intellectual property to Ireland that year in what was essentially a paper transaction in order to minimize the taxes they owed. As a result of that, Ireland's central bank came up with a modified Gross National Income measure because GDP and GDP per capita were essentially useless for them.
GDP includes a ton of things that don't directly impact residents' well being, or at least don't impact them to anywhere near the degree that the dollars suggest. Depreciation of intellectual property is a good example. So when Apple depreciates the value of their Irish-domiciled iPhone patents, the value of that depreciation gets added to Ireland's GDP. But it's a paper transaction that doesn't result in that money entering the Irish economy.
Or when Irish-domiciled foreign companies have retained earnings that flow almost entirely to foreign investors. Again that is included in Ireland's GDP even though virtually all of the money came from outside the country and will go back outside the country when it's paid to shareholders. Yeah, there are some benefits to this for Ireland in that it creates some jobs and they get a bit of tax revenue. But only a small portion of that money ends up staying in Ireland.
So for tax havens and places that have tons of companies headquartered there (the US being a good example of the latter), the correlation between GDP and what people actually earn can be pretty weak.