What does GDP measure and is it an accurate macroeconomic indicator?
GDP stands for gross national product and measures the value or worth of an overall economy. In other words, GDP indicates how wealthy a nation is.
Whether or not it is an accurate macroeconomic indicator is debatable. First of all, it does not have any values attached to it. As a result, GDP does not consider what the nation is spending on or profiting from. In this way, it cannot give any information about the nation other than just a number. The Human Development Index, which considers happiness levels and health, may be a solution to more accurately indicating the overall strength of an economy.
Another issue with GDP as an indicator is that it does not include any information about the distribution of money. GDP per capita on the other hand tells us how wealthy a nation really is by dividing overall GDP by population. Sole GDP may be higher in one country, but this country may not be as wealthy as it appears if it has a huge population.
Not necessarily how wealthy because wealth is a measure of many years. GDP is more about income. You did not really apply Whelan in a meaningful way although your examples are in the ballpark.
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