GDP

Key measures of economic performance

Key measures of economic performance

Traditionally, the key measures of economic performance in macroeconomics include: Economic growth – real GDP growth. Inflation – e.g. target CPI inflation of 2% Unemployment – target of full employment Current account – satisfactory current account, e.g. low deficit. Other measures of economic performance can include: Government borrowing/national debt Real disposable incomes Income inequality (Gini coefficient) Labour productivity Investment levels Exchange rate Measures of well-being – surveys which measure overall living standards. e.g. ONS well-being index. Human development index (HDI) – a measure of economic development. It is a…

Top 10 Economies

Top 10 Economies

When measuring the largest / best economies, there are different ways of ranking countries. Nominal GDP in $US. This is the simplest measure and shows the actual final market value of GDP produced in the economy. It is useful for comparing levels of international trade. It uses the official exchange rate. GDP in Purchasing Power Parity (PPP). This takes into account the different costs of living in countries. For example, a country like India will have a higher PPP GDP because although GDP is low, official exchange rates don’t reflect the…