Principles of Economics- Mankiw (5th) 490

Principles of Economics- Mankiw (5th) 490 - 506 PA R T E I...

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506 PART EIGHT THE DATA OF MACROECONOMICS CASE STUDY INTERNATIONAL DIFFERENCES IN GDP AND THE QUALITY OF LIFE One way to gauge the usefulness of GDP as a measure of economic well-being is to examine international data. Rich and poor countries have vastly different levels of GDP per person. If a large GDP leads to a higher standard of living, then we should observe GDP to be strongly correlated with measures of the quality of life. And, in fact, we do. Table 22-3 shows 12 of the world’s most populous countries ranked in order of GDP per person. The table also shows life expectancy (the expected life span at birth) and literacy (the percentage of the adult population that can read). These data show a clear pattern. In rich countries, such as the United States, Japan, and Germany, people can expect to live into their late seventies, and almost all of the population can read. In poor countries, such as Nigeria, Bangladesh, and Pakistan, people typically live only until their fifties or early
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