At the start of every term, the macro team gives the GDP lecture, in which we explain what GDP is and why we might care about it. Which always raises the question: Aren’t there other things we care about?
The flip answer is no, it’s all about the money. But of course we care about other things. Those things, however, tend to be so highly correlated with GDP that we get a pretty good approximation with GDP alone. At the country level, you might think about life expectancy, a clean environment, access to Netflix — lots of things cross my mind. Stan Zin passes on a good example: the UN’s Human Development Index, which combines income per person, life expectancy, and education. When you graph it against income per person, you find that they’re almost the same thing — click here and see for yourself. And press play to see how this has changed since 1980.
For extra credit: What countries are outliers here? Why?