How do we compare different countries??

Global Studies

Useful ways to compare countries

• Population • GDP / GDP per capita• Trade Balance• Human Development Index• Demographic Transition Model

Population

• What are some problems with having too many people??

How strong is an economy??• GDP (gross domestic product) - one of the primary

indicators used to measure the health of a country's economy.

– Most used indicator of a country’s development.

• GDP represents the total monetary value of ALL goods and services produced over a specific time period.– We use GDP (PPP) (Purchasing Price Parity) because it

most accurately compares GDP between countries.

How strong is an economy??• GDP (gross domestic product) - one of the primary

indicators used to measure the health of a country's economy.

– Most used indicator of a country’s development.

• GDP represents the total monetary value of ALL goods and services produced over a specific time period.– We use GDP (PPP) (Purchasing Price Parity) because it

most accurately compares GDP between countries.

Market Size by GDP

Calculating GDPGDP = C + G + I + NX

where:

"C" - equal to all private consumption, or consumer spending, in a nation's economy"G" - the sum of government spending"I“ - the sum of all the country's businesses spending on capital"NX" - the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)

GDP per capita

• What is it?• GDP per person – How much a single person

consumes/produces.• Take the GDP and divide it by total population• It helps to define a person’s standard of living

(or quality of life).

GDP

• A significant change in GDP, whether up or down, usually has a significant effect on the stock market.

– A bad economy usually = lower profits for companies = lower stock prices = less jobs = lower wages.

– GDP helps economists determine whether an economy is in a recession.

Human Development Index

• Some problems with measuring only with GDP per capita.

• United Nations Development Program (UNDP) computes a Human Development Index for each country each year.

Human Development Index

• The human development index (HDI), composed of three indicators:

– life expectancy

– education (adult literacy and combined secondary and tertiary school enrollment)

– GDP per capita.

Demographic Transition Model

• Four Stages

• Stages related to birth and death rates.

• Where are we??

Demographic Transition Model