How to Compare GDP Between Countries

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Gross domestic product, or GDP, is an index of a country's economic performance within a set period of time. It measures the total value of all products and services produced by a country, either by summing up all private and government expenditures, calculating the market value of total production, or summing up the income of all producers. However, you don't have to go through this process to compare economies; efficiency based on the GDP, as the relevant statistics are available by credible sources. The only thing you have to look out for is whether the data you have for each country are comparable.

  • Visit the website of the International Monetary Fund and click on the data and statistics tab on the top of the page. The site will guide you toward creating a report listing the most recent GDP figure of every country in the world.

  • Select the two countries and write down their GDP figures. The task is not over, as nominal GDP alone is not a means of comparing economies' efficiency. For example, the U.S. GDP is $13.25 trillion, while India's is $1.27 trillion. However, India has a much larger workforce.

  • Visit the offices of statistics of each country you have selected. For example, for the U.S. enter the U.S. Census Bureau website and for Germany go to the Federal Statistical Office (Statistisches Bundesamt Deutschland). In case you cannot find the country's relevant bureau, visit the CIA World Factbook online.

  • Check the population projection of each country, the number of people in each age group and its percentage out of the general population. Note the figures of the economically active population, aged between 18 and 65, as these are the people working and contributing to the GDP. Older or younger workers are the exception and won't affect the results of your comparison greatly.

  • Compare the countries on the basis of the amount of wealth they produce - total goods and services - according to their workforce's size. This way you avoid misconceptions about different economies' efficiency: the management of limited raw materials and human resources to produce as much value as possible.

Tips & Warnings

  • When preparing a GDP report on the International Monetary Fund website, make sure all data is presented in U.S. dollars and not in each country's currency.
  • GDP adjusted for purchasing power parity - what people can buy with the same amount of money in their respective countries - can help you compare the relative standard of living of different countries, but not the efficiency of their economies in absolute values.

References

  • Photo Credit Hemera Technologies/AbleStock.com/Getty Images
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