Measures of Economic Growth

• GDP

  • Income = Output = Expenditure
  • Benefits: Measure of growth, Measure of living standards
  • Negatives: Income inequality, Double counting, Informal activity
• GDP per Capita


  • GDP divide by Population
  • Negatives: Same issues as GDP, Factor income abroad, Influence of FDI (foreign direct investment)
• GNI per Capita


  • GNI = GDP + net factor income
  • Income earned by domestic workers/firms - Income earned by foreign workers/firms at home
• Green GDP (accounts for the environmental costs of production)


  • Green GDP - Environmental costs
  • Negatives: Monetary value on environmental costs difficult, GDP could fall dramatically