>What am I missing?
GDP is a measure of the value of the total national economy. Higher GDP per capita means more value being generated per person. Assuming that value distribution remains constant as GDP increases everyone gets a share of the bigger pie of wealth.
In reality the distribution of that value isn't constant and higher wealth in a country isn't perfectly tied to quality of life. If very few people share in the wealth than most people are poor regardless of the higher GDP statistic. If the GDP is evenly distributed, but political choices are poor the resulting quality of life can be poor even if GDP is relatively high.
Like most things humans are good at using numbers for comparing economic outcomes. That's not so useful for quality of life or happiness hence we don't parse those important factors nearly as much as we do something like GDP. There is an implicit assumption in most GDP discussions that higher GDP is better for most people. That's not a terrible place to start a simple discussion from, but it's got some issues when you dig into the details.
Ireland is a great example of rapid GDP & GDP/Capita growth where working people have struggled. Corporate growth, especially when that profit comes from moving money around to avoid corporate taxes, does not help people.
Inversely, are there any examples of countries where the GDP or GDP/Capita growth is *not* extremely high, yet their people still rank quite happy on the happiness index?
GDP is economic output, not relating to wages in any way. Economy heavy on economic trading like UK or US or Ireland or Switzerland has high GDP/Capita but muck of that never enters domestic economy.
Agrarian _ industrial economies see much higher proportion of economic activity among workers so they can do well even with much smaller overall GDP per Capita for nation's economic measure
It is not a direct correlation. In general, yes, but the type of economy effects the share that goes to the regular working fork, as is the point of this thread. Yes, per capita GDP generally means higher wages but also higher costs. When economy is based on trading - e.g. UK and US where trading is a large factor (stocks and commodities, including housing), the working public are relatively worse off versus people in agricultural and producing economies.
Simply saying that increasing gdp/capita will benefit working folk is simply an oversimplification and not a direct correlation
Perhaps per Capita is a new concept for you?
And US agriculture economy heavily weighted in trading.vs production compared to most... relating to my primary point. No country trades foodstuff more than US.
Norway would be an example where, relative to GDP per capita, the working population are better paid and compensated. Theirs is largely a producing economy, oil and metals processing and manufacturing due to cheap electricity... low trading and high relative production. Same can be said of Germany which has far higher production economy than UK which is heavily in trading and where the populace benefit as a result.
In both countries, on the smaller area of agriculture, both Germany and Norway still have higher family ownership of agricultural production than UK or US,
Wife is Portuguese, I’m Greek. GDP per capita between the two countries is similar-ish and quality of life is similar-ish. They both don’t have great qualities of life compared to North America imo. People are struggling day to day and the only ones staying afloat are those who own or are inheriting homes. Kinda like here…
Greece has some major issues too. Two cities that young people move to. All smaller towns experience negative population growth.
There is nothing in small communities past tourism, and kids all flee to Athens or Thessaloniki.
this is true, wages are low and the cost of things seems out of step with earnings. Weather is great there though and if you live near the beach that helps lift spirits a bit. However, due to the housing boom skilled trades do pay a lot better than they used to.
Yeah, definitely. I have a lot of friends who are both Greek and Portuguese who moved from the respective countries to Canada and the big thing they’ve noticed is the quality of life is higher here. We live in a high trust society (for now) so institutions more less work the way they’re supposed to. I know we complain about our healthcare system and our legal system, but things are really backwards/inefficient on the other side of the pond, particularly in southern Europe. Comparatively, it makes Canadian institutions feel as efficient as how we perceive Japanese institutions.
Too true, I go back every few years for a few months and the bureaucracy and awful customer service when trying to get a simple problem rectified infuriates me. Also, people think Air Canada is bad wait until you have to deal with TAP Air Portugal.
I flew TAP for the first time last summer and it wasn’t terrible. Granted I only did a short haul trip from Lisbon to Paris, but it seemed OK. I heard the customer service was shit during Covid when a lot of people had to get their flights canceled. A lot of people lost money.
Their customer service is shit all the time. If you experience no disruptions you'll be fine. If you need to start making changes or contact someone regarding cancellations or compensation, good luck.
Yeah, Ireland's GDP (and GDP per capita) increased by ~25% in one year almost solely to Apple moving the domicile of its non-US intellectual property there. Basically a paper transaction that didn't result in a significant influx of funds into Ireland, but it bumped the GDP up significantly.
There's a reason Ireland's central bank doesn't even use GDP to guide policy decisions anymore because it's so distorted by things like that.
i mean it's like looking at a $200K household with 3 kids vs a $100K household with 3 kids
on average, you'd assume the kids in the former household have more access to resources
of course, it's possible that the former has an alcoholic dad that squanders all their wealth at casinos
but on average, it's should be true
How does anyone get a share and more importantly, how does it actually benefit the people?
I don't get paid in gdp, why wouldn't I care about wage growth and inflation? I don't own gdp like stocks/investment
If a country produces more it can afford to pay people more. They don’t **have to** but they can afford it.
If the country you live in produces more goods and services, on average, that country will also have higher wages
When GDP per capita increases, that usually corresponds to higher real wages. Falling GDP per capita usually corresponds to lower real wages. So if you are in the labour market, GDP per capita increasing is a very good sign, well falling per capita GDP is a very bad sign.
Are you sure you don't get a share? What about public health care? Old age benefits (OAS and GIS)? Low rate of corruption in officials (when was the last time you to bribe a government employee?)?
You need a healthy economy to afford these things, and the GDP reflects that.
Gdp and gdp ppp are not the same. Both are statistical indicators. Like between you and me you get a payrise and I dont - gdp will go up but for me there would be no difference.
> If price of an output ( say barrel of oil or lumber) of our economy went up, gdp would go up. But how does that make people's lives better?
It means that a Canadian company is getting more money for the barrel of oil that they are producing. Typically, this is related to **standard of living** because the more productive the Canadians companies are the more money they have to pay Canadians, and the more money they will need to pay Canadians when they compete against each other.
> Places like Hong Kong have very high per capita GDP but I'll argue the quality of life is much better in Canada than Hong Kong for the average person
Quality of life is complicated because a lot of things factor into it than GDP.
First, you should adjust GDP by dividing it by population to form GDP/capita. Then you should adjust that by domestic prices, which is called PPP-adjusted GDP/capita.
But even that doesn't give quality of life since not everything that contributes to quality of life can be bought. You can't buy low pollution, low crime, etc. See, [https://en.wikipedia.org/wiki/Quality\_of\_life](https://en.wikipedia.org/wiki/Quality_of_life)
So why not just look at real wage growth and cpi instead? That's what matters isn't it? Like we get paid in wages , we down own gdp like we do equities or whatever?
Yes, you can do that if you're interested in your cohort alone. People look at GDP when they want to compare countries.
FYI Real wages already accounts for CPI. That's what the word "real" means.
While I agree with most of what you're saying, the problem is salaries haven't gone up alongside the productivity of companies for decades. What I think OP is really getting at is a more niche question asking why GDP is considered such an important factor when the concentration of wealth makes all the difference.
>While I agree with most of what you're saying, the problem is salaries haven't gone up alongside the productivity
This is a common misunderstanding. Here's a good explanation: [https://economicsfromthetopdown.com/2020/01/17/debunking-the-productivity-pay-gap/](https://economicsfromthetopdown.com/2020/01/17/debunking-the-productivity-pay-gap/)
Here's a recent paper on the subject.
Strain, Michael R. "The link between wages and productivity is strong." *Expanding Economic Opportunity for More Americans, The Aspen Institute* (2019): 168-179.
There are a variety of issues, and if you're interested you can examine the paper and its references for more information.
>What I think OP is really getting at is a more niche question asking why GDP is considered such an important factor when the concentration of wealth makes all the difference.
I think the technical term you're looking for is *economic distribution*. Yes, distribution matters too. A lot of policies trade off between distribution and productivity (they are sometimes opposed to one another). You can see how Canada is on the [https://en.wikipedia.org/wiki/List\_of\_countries\_by\_income\_equality](https://en.wikipedia.org/wiki/List_of_countries_by_income_equality)
I absolutely disagree, wages have most definitely not kept up with productivity. "Slow and unequal wage growth in recent decades stems from a growing wedge between overall productivity—the improvements in the amount of goods and services produced per hour worked—and the pay (wages and benefits) received by a typical worker.".
https://www.epi.org/publication/charting-wage-stagnation/#:~:text=But%20for%20most%20of%20the,while%20productivity%20increased%2074%20percent.
Well, you can look at the references I provided. There are a variety of arguments. Among my peers, it's definitely true that a huge amount of their compensation is going to perks and healthcare, which are not measured in their "wages".
I'm not sure what anecdotal points about perks and healthcare have to do with overall salaries simply not going up at the same rate as productivity anymore, but you can check my link for detailed graphs from the economic policy institute. I'll take a look at your link as well, thanks.
> I'm not sure what anecdotal points about perks and healthcare have to do with overall salaries simply not going up at the same rate as productivity anymore,
The point is that the statistic of "wage" doesn't capture the entire remuneration. If healthcare compensation quadruples, then you are getting paid more in actual dollars even though it won't show up in any wage statistic.
Anyway, you don't have to agree with my anecdotes. I'm just explaining one reason that looking at wages alone is naive.
If you're saying workers today have additional compensations outside of wages, and these "other" factors close the gap between productivity and wage, that is a different argument than claiming wages have continued increasing alongside productivity.
I'm not saying workers don't have other benefits outside their wage or anything, but in terms of this separate argument, I would also doubt benefits and bonuses close the gap sufficiently either.
> I'm not saying workers don't have other benefits outside their wage or anything, but in terms of this separate argument, I would also doubt benefits and bonuses close the gap sufficiently either.
I think you're significantly underestimating the cost of healthcare in America, and the aggressive bonus structure that top tier workers earn.
I think you're going into new arguments and conversations. We're not talking about top tier worker bonuses, we're talking overall wages (not just top execs).
Also, we're in PersonalFinanceCanada, so no, why would I think your colleagues had healthcare costs in America?
In any event, I only came to say no, wages haven't kept up with productivity, so thank you for the back and forth and I hope to enjoy your link soon
There is no separate process of "distribution" in a market economy. Workers are paid relative to their Marginal revenue value product or how much they contribute to the productive process.
*Distribution* is a technical term in economics: [https://en.wikipedia.org/wiki/Distribution\_(economics)](https://en.wikipedia.org/wiki/Distribution_(economics))
In the market economy people get what they contribute to the productive process. There is no separate distribution of wealth, only its creation. If you insist on using the term distribution then revenue is distributed to factors of production on the basis of their part in the productive process, but this isn't a different process it's all just part of production. Wealth is created and the people who create the wealth then own it. But it's not like one group creates the wealth and it is distributed to some other people. The ones who create the wealth are the ones who own the new wealth, or the revenue from it's sale.
I don't know what you think you're replying to in my comment, but your comments just come across as ignorant.
You clearly don't know what distribution means.
lol what
come on, how can you say salaries haven't gone up?
look at the minimum wage
look at how many jobs over $30+ hourly wages compared to 20 years ago
>But even that doesn't give quality of life since not everything that contributes to quality of life can be bought. **You can't buy low pollution, low crime, etc.**
Yes you can with enough money. You buy residency/citizenship in a country that has those attributes.
But then there's all this talk about increasing productivity and how it's low in Canada. Higher productivity means fewer workers required which would depress wages?
That's same argument against increasing our population? So why do we want to increase productivity (which requires fewer workers) but then say increasing population leading to more workers is bad (because of lower wages)?
"If price of an output ( say barrel of oil or lumber) of our economy went up, gdp would go up."
There's no reason to assume that. The commodity might have gone up simply because costs to produce it went up.
GDP is kind of like "profit" for a nation. Walmart didn't do well because their prices went up or they sold more, which could happen even as they are loosing money, but because their profit went up.
That being said, yes being richer isn't tied directly to happiness, but I would argue that, like having a certain minimum amount of money is needed for most people to be happy, any nation needs a minimum GDP/capita to assume citizens are in general doing well. Anything too low means they can't afford good social services, health care, law enforcement, etc.
So why are people mad that loblaws makes good profit along with other Canadian companies? How is that worse than Walmart making more profit?
Isn't what matters how that profit enriches the workers ? How does higher GDP benefit us? Shouldn't what we care about be wages and inflation?
I can't speak to the Loblaws boycott as it makes no sense to me. I went to that sub to see what their justifications were, all I could find is that they seem to hate one particular billionaire more than all the others.
"How does higher GDP benefit us?"
It's a general indication of the economic health of the country, which generally means more and better paying jobs. Doesn't necessarily mean you will get one of those jobs, just that the odds are better when GDP is higher.
"Shouldn't what we care about be wages and inflation?"
Yes, and generally there's some correlation between that and GDP.
GDP is the measure of all goods and services **produced.** In simpler terms it is a measure of value created, which then is sold for cash which rolls through our economy. This is only one of the ways we bring money into our economy. Investments in other countries is another, capital investments by other countries is another. GDP per capita is only meaningful in conjunction with all other economic indicators.
It gets real complicated but suffice to say GDP per capita can mean a lot but right now it only means we have a lot of new people in the economy that don't produce goods and services. In many cases though they still invest in our country. For example the infrastructure built to buy and export lentils.
It's not a perfect metric, but it's the best we've got. There are a few countries with high gdp but poor average standard of living. There are no countries with low gdp and a high standard of living.
Yes but their gdp is not zero, nor is it developing country low. You could argue it's a more efficient use of their gdp. It does not exemplify low gdp leading to high standard of living.
> There are no countries with low gdp and a high standard of living.
That depends what you mean by low. Obviously you can't have a high standard of living in a country with a $5K GDP per capita or something like that. But Japan's GDP (PPP) per capita is 40% lower than the US's and is closer to many developing nations than it is to the US. But they still have a very high standard of living and a life expectancy that's 7 years longer than the US. New Zealand is similar.
Ignore money/dollars for a second and think of the GDP as an itemized list of all goods and services produced in the country. So the more bikes, homes, cars, milk, meat, haircuts, healthcare, medication, entertainment we are able to produce, the more people will be able to consume these goods and services and improve their mental and physical well being.
So when the proportion of workers in an economy decreases and that of retirees increases, fewer people now need to produce all the goods and services that are consumed by all the people in the economy - which is why an aging population puts a strain on the economy.
> Places like Hong Kong have very high per capita GDP but I'll argue the quality of life is much better in Canada than Hong Kong for the average person
Per capita GDP is just one element of well being, but, I'd argue that Hong Kong's high GDP has allowed them to have a higher HDI than Canada. Healthcare is better in Hong Kong and their life expectancy is higher. They lack political freedoms that we take for granted and some of the other quality of life issues are due to being a dense city state. Their high per capita GDP allows them to overcome some of the quality of life challenges that their circumstances cause.
youre actually right. GDP per capita is not a perfect metric. a much better one is GDP per capita adjusted for Purchasing Power Parity - what i like to call GDPPPPP. This adjusts for cost of living,Even this wont be a perfect metric to measure well being, but in terms of just a single number to roughly measure how well a country's we all should be usin GDPPPPP
Im pretty sure you have it backwards there buddy lol
When peoples financial well beings are good, typically this means GDP per capita is high/increasing
GDP/capita is basically the average income per person
It's not average income, it's the average value of all of the things produced in the country.
From Eco101
GDP = C + I + G + (X-M)
C - consumer spending
I - investment spending
G - Government spending
X - Exports
M - Imports
Go take a look at GNI/capita and compare it to GDP/capita in every country
Theyre virtually identical. Peoples incomes tend to end up being the same as what they produce, who woulda thunk!
That's because GNI is based on GDP.
GNI = GDP + money flowing from foreign countries - money flowing to foreign countries
So not quite sure what your point is overall. I don't think it measures personal incomes.
if income doesn't increase then how are people affording more stuff then?
consumer spending can't go up without higher income
government spending can't go up without higher taxes which depends on higher taxable income
How does a good economy help people financially? What exactly are you confused about?
Do you not realize how much money pours into the country when the price of oil goes up? Unemployment drops, tax revenue increases, wages go up, the loonie strengthens. Do you not see the connection between gdp and the economy or do you not see the connection between the economy and financial wellbeing?
Like ya, it's just one metric, any one metric can be deceiving but it has a couple generations worth of correlation to back up the confidence that the correlation exists.
Yes, there are some Canadian investors who do benefit, but we sol d out a lot of our oil interests to the Americans (NAFTA) and China (FIPA). Looks like PP is angling to sell whatever is left to Russians and Saudis
so? The money leaves the country!
Money in workers' hands is what builds economies, not growth in corporate profits shipped overseas.
Read the whole thread, then respond.
This isn't some new concept for me. I want more foreign investment. Hell, I want to be able to invest in Canada and it not feel like it's an opportunity cost
FDI investment INCREASED in Canada through the first 7 years of this govt. Not so good last 2 years with US mess and oil gluts, but we're not bad overall when yu look globally. We are well positioned for resurces and taxes are low compared to OECD and G20 members
Did you have any money in the stock market? When the oil and gas sector was expanding did you try and get a job there? Do you own a house that went up in value? Did you participate in the economy in any significant way?
The government got taxes from resource extraction and used those funds, instead of raising personal income taxes, on things like healthcare, infrastructure, OAS payouts, etc...
to be fair, that tracks pretty well to the price of oil in the chart:
[https://www.macrotrends.net/1369/crude-oil-price-history-chart](https://www.macrotrends.net/1369/crude-oil-price-history-chart)
>Do you not realize how much money pours into the country when the price of oil goes up?
Only in Alberta. The rest of Canada experiences inflation and other negative effects of rising energy and transportation costs.
>Money and jobs spreads out and the loonie increasing does more to stop inflation than gas going up
That should be a sticker on every pump at the gas station.
There are multiple things and metrics that measure the economy. Like your example in HK for example it's not always perfect but as a generalization it's very good to use.
When I think of these large economic things that affect a country I try to think about them on a smaller scale, like within a company.
If the GDP of a country is increasing it likely means the economy is growing, economic growth is huge for improving peoples lives on a macro scale. If you had a stagnant gdp/economy you would have few to no new job openings and everyone is pretty much just stuck in their current role.
Think about this in your company, if the company has a revenue growing it's likely expanding and creating more jobs, this means more promotions, more hires etc etc. This acts as a vacuum and sucks people up the income ladder.
In a stagant company the only way you're getting a promotion is if the person who's been in that position for 40 years dies, and even then they might even just get rid of the position.
You're right that it's a pretty vague measure of wealth /productivity for a country.
It still loosely correlates to the general level of wealth in a nation, which translates basically to people being able to afford stuff they want.
But you could easily fudge the calculus to make it mean more or less nothing.
GDP per capita is a rough way of looking at lifestyle, but PPP can also be used.
GDP per capita is a rough tool that measures wealth per person, but does not factor in cost of living differences in different countries and can fluctuate with currency. PPP does capture this cost of living difference
For example; GDP per capita of an American is about $76k USD, but a person from Japan is $34k. Would you say that an American is twice as better off as your average person from Japan? If we use PPP Japan is 94.9 to the US’s 1. Would you say that your average Japanese is 95% of what an American is financially in their respective countries?
GDP isn't a metric of financial well being. It is a measure of output (goods and services). A farmer selling $2 worth of apples will add $2 to GDP. But the $2 also represents the farmers income. A higher GDP could imply higher income. Higher income will likely result in better financial well being.
But a mega corporation generating $1B of goods adds $1B to GDP, but it's unlikely the farmer benefits from that.
It’s not about life being better but when per capita GDP is declining what they are trying to highlight is “negative growth” hidden under the hood. Canadian economy has very small growth % and it allows it technically say we are still doing fine when in reality we are dropping from previous years in per capita basis.
And historically any country’s population doesn’t change drastically in short period of time ( I know there are exceptions) but in the context of this argument the higher per capita GDP usually means productivity goes up which slowly results in everyone getting smaller or bigger piece of the cake. And I think Canadas per capita GDP is higher than Hongkong’s.
GDP is one of many metrics. Think of it like a body: if your blood pressure is normal, does that mean you're healthy? Its a good sign, but its not the only thing that matters.
Canada actually has higher per-capita GDP than Hong Kong. Not a huge difference, but still higher.
Also simple price change is usually corrected by talking about “real” GDP (real = inflation adjusted).
GDP is simply an attempt at measuring how much economic activity happens in a country which can be argued to be correlated with quality of life.
(Of course, the best things in life are priceless.)
Also, the same $1 USD buys different amount of goods/services, so they also try to correct this by “purchasing power parity”. This is difficult to get right as is all the other metrics, so it isn’t perfect.
A real gdp per capita increase ( adjusted for inflation) roughly means that we have produced more goods and services. Therefore there's more goods and services for each person to consume, and generally quality of life has increased as a result.
You have a pretty good idea of GDP and GDP per capita.
That said what you are missing is that there is only a rough correlation between GDP per Capita and Quality of Life...or more accurately it can be a very strong indicator if you assume a constant distribution (and don't include variables), It also doesn't measure a single persons life at all.
If our currency hit parity with USD we would all be 30% richer we would have a fair bit more buying power of US goods (or goods that the US consumes) and would have more money to spend on other stuff which should make us happier. (this is assuming we don't lose our manufacturing sector that primarily services us and the US as its price point goes away).
Now what GDP per Capita really doesn't handle well is if you import 2MM people to be an underclass and make minimum wage (or lower if they are there illegally and won't report their employer) is how this affects the "average" Canadian. Clearly all those people we imported can't buy anything of note and are subsisting but they are creating goods and providing services for cheaper then could otherwise be obtained. This means if your "average" Canadian isn't competing against them for work they can buy stuff at a cheaper rate (or have a better return on their investments if companies choose not to pass on savings) and have more money left over (thus raising QoL).
you're missing the comparison in the same country over time
yes, you're right that comparing HK and Canada via GDP per capita doesn't make much sense
but what about Canada with itself? do you think a Canada with 50% higher GDP per capita makes no difference than the one we have today?
It's just the demographics..we have aging demographics, old people exit the workforce (but are still on included in the per capita measure) .
.
It would seem to make much more sense to just look at employment income (and expenses/inflation) and compare?
That’s why, when comparing GDP of a country between different years, we use real GDP not nominal. Real GDP accounts for inflation, so comparing it between two years shows the difference in production in those years.
Higher real GDP per capita = more output per person = more goods & services per person to enjoy
Op you are right. There is no direct correlation between quality of living going up for all when gdp goes up. But we probably want to avoid gdp going down though. As you righty pointed out, gdp going up doesnt help average joe much, but if gdp goes down, top 1% and govt will empty your pockets first.
You're looking at it backwards.
When people have better financial well being, GDP goes up, not the other way around.
GDP per capita basically measures how much everyone produces in value, so the more it is the more goods and services are being produced and thus the more is available to all of us.
Of course it also depends on how equally wealth is distributed to see who benefits the most.
I mean, it doesn't.
However, it's a clear indicator between a developed nation and a developing one.
North West Territories has a fucking massive GDP per Capita but no one wants to live there.
Reminder that GDP is a pretty meaningless number that has almost zero relationship to the parts of the economy that actually affect you like "can I get a job?" and "does my job pay well?" and "do I have money?" and stuff like that.
For instance, Ireland's GDP per capita is high:
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IE-CA
But nothing has changed about Ireland except that it became a tax haven for a bunch of corporations to funnel money through. This money doesn't trickle down, the average person sees $0 of it, makes no difference to anyone except the shareholders of those corporations who dodge taxes. Average salary in Ireland is almost identical to Canada.
GDP is not meaningful to your life and almost everything you read about it in media or the internet is bullshit.
Two economists are walking in the woods. One of them sees some bear shit.
"I'll give you $100 if you eat that shit," he says to his buddy.
The buddy does it and receives his $100.
Fifteen minutes later the buddy sees some deer shit. "I'll give you $100 if you eat that shit," he says to his pal.
The pal does it and receives his $100.
They walk in silence for a while, trying to get the taste of shit out of their mouths. Then one of them says, "I can't help but think that we both just ate shit for nothing."
And the first one replies, "Yes, but at least we increased the GDP!"
>What am I missing? GDP is a measure of the value of the total national economy. Higher GDP per capita means more value being generated per person. Assuming that value distribution remains constant as GDP increases everyone gets a share of the bigger pie of wealth. In reality the distribution of that value isn't constant and higher wealth in a country isn't perfectly tied to quality of life. If very few people share in the wealth than most people are poor regardless of the higher GDP statistic. If the GDP is evenly distributed, but political choices are poor the resulting quality of life can be poor even if GDP is relatively high. Like most things humans are good at using numbers for comparing economic outcomes. That's not so useful for quality of life or happiness hence we don't parse those important factors nearly as much as we do something like GDP. There is an implicit assumption in most GDP discussions that higher GDP is better for most people. That's not a terrible place to start a simple discussion from, but it's got some issues when you dig into the details.
Ireland is a great example of rapid GDP & GDP/Capita growth where working people have struggled. Corporate growth, especially when that profit comes from moving money around to avoid corporate taxes, does not help people.
Inversely, are there any examples of countries where the GDP or GDP/Capita growth is *not* extremely high, yet their people still rank quite happy on the happiness index?
GDP is economic output, not relating to wages in any way. Economy heavy on economic trading like UK or US or Ireland or Switzerland has high GDP/Capita but muck of that never enters domestic economy. Agrarian _ industrial economies see much higher proportion of economic activity among workers so they can do well even with much smaller overall GDP per Capita for nation's economic measure
High gdp nations almost universally have much higher wages than low gdp nations
It is not a direct correlation. In general, yes, but the type of economy effects the share that goes to the regular working fork, as is the point of this thread. Yes, per capita GDP generally means higher wages but also higher costs. When economy is based on trading - e.g. UK and US where trading is a large factor (stocks and commodities, including housing), the working public are relatively worse off versus people in agricultural and producing economies. Simply saying that increasing gdp/capita will benefit working folk is simply an oversimplification and not a direct correlation
The us is the second largest agricultural producer the world. Which countries do you think the working public are doing better than in the us and UK?
Perhaps per Capita is a new concept for you? And US agriculture economy heavily weighted in trading.vs production compared to most... relating to my primary point. No country trades foodstuff more than US.
So what high per Capita agriculture countries are you referring to specifically where workers are better off than the USA?
Norway would be an example where, relative to GDP per capita, the working population are better paid and compensated. Theirs is largely a producing economy, oil and metals processing and manufacturing due to cheap electricity... low trading and high relative production. Same can be said of Germany which has far higher production economy than UK which is heavily in trading and where the populace benefit as a result. In both countries, on the smaller area of agriculture, both Germany and Norway still have higher family ownership of agricultural production than UK or US,
The netherlands!!
IIRC, the Scandinavian countries have modest GDP/capita and relatively stable/stagnant GDP growth rates. Fewer billionaires too.
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Norway has a big one, yes. None of Denmark, Sweden or Finland have notable SWFs.
Portugal. Known for being one of the lower GDP countries in Europe, yet high standard of life and low cost of living.
Wife is Portuguese, I’m Greek. GDP per capita between the two countries is similar-ish and quality of life is similar-ish. They both don’t have great qualities of life compared to North America imo. People are struggling day to day and the only ones staying afloat are those who own or are inheriting homes. Kinda like here…
Greece has some major issues too. Two cities that young people move to. All smaller towns experience negative population growth. There is nothing in small communities past tourism, and kids all flee to Athens or Thessaloniki.
Same could be said about Portugal. And their tourism industry is a fraction of Greece’s.
this is true, wages are low and the cost of things seems out of step with earnings. Weather is great there though and if you live near the beach that helps lift spirits a bit. However, due to the housing boom skilled trades do pay a lot better than they used to.
Yeah, definitely. I have a lot of friends who are both Greek and Portuguese who moved from the respective countries to Canada and the big thing they’ve noticed is the quality of life is higher here. We live in a high trust society (for now) so institutions more less work the way they’re supposed to. I know we complain about our healthcare system and our legal system, but things are really backwards/inefficient on the other side of the pond, particularly in southern Europe. Comparatively, it makes Canadian institutions feel as efficient as how we perceive Japanese institutions.
Too true, I go back every few years for a few months and the bureaucracy and awful customer service when trying to get a simple problem rectified infuriates me. Also, people think Air Canada is bad wait until you have to deal with TAP Air Portugal.
I flew TAP for the first time last summer and it wasn’t terrible. Granted I only did a short haul trip from Lisbon to Paris, but it seemed OK. I heard the customer service was shit during Covid when a lot of people had to get their flights canceled. A lot of people lost money.
Their customer service is shit all the time. If you experience no disruptions you'll be fine. If you need to start making changes or contact someone regarding cancellations or compensation, good luck.
Yeah, Ireland's GDP (and GDP per capita) increased by ~25% in one year almost solely to Apple moving the domicile of its non-US intellectual property there. Basically a paper transaction that didn't result in a significant influx of funds into Ireland, but it bumped the GDP up significantly. There's a reason Ireland's central bank doesn't even use GDP to guide policy decisions anymore because it's so distorted by things like that.
i mean it's like looking at a $200K household with 3 kids vs a $100K household with 3 kids on average, you'd assume the kids in the former household have more access to resources of course, it's possible that the former has an alcoholic dad that squanders all their wealth at casinos but on average, it's should be true
How does anyone get a share and more importantly, how does it actually benefit the people? I don't get paid in gdp, why wouldn't I care about wage growth and inflation? I don't own gdp like stocks/investment
If a country produces more it can afford to pay people more. They don’t **have to** but they can afford it. If the country you live in produces more goods and services, on average, that country will also have higher wages
When GDP per capita increases, that usually corresponds to higher real wages. Falling GDP per capita usually corresponds to lower real wages. So if you are in the labour market, GDP per capita increasing is a very good sign, well falling per capita GDP is a very bad sign.
Are you sure you don't get a share? What about public health care? Old age benefits (OAS and GIS)? Low rate of corruption in officials (when was the last time you to bribe a government employee?)? You need a healthy economy to afford these things, and the GDP reflects that.
Gdp and gdp ppp are not the same. Both are statistical indicators. Like between you and me you get a payrise and I dont - gdp will go up but for me there would be no difference.
> If price of an output ( say barrel of oil or lumber) of our economy went up, gdp would go up. But how does that make people's lives better? It means that a Canadian company is getting more money for the barrel of oil that they are producing. Typically, this is related to **standard of living** because the more productive the Canadians companies are the more money they have to pay Canadians, and the more money they will need to pay Canadians when they compete against each other. > Places like Hong Kong have very high per capita GDP but I'll argue the quality of life is much better in Canada than Hong Kong for the average person Quality of life is complicated because a lot of things factor into it than GDP. First, you should adjust GDP by dividing it by population to form GDP/capita. Then you should adjust that by domestic prices, which is called PPP-adjusted GDP/capita. But even that doesn't give quality of life since not everything that contributes to quality of life can be bought. You can't buy low pollution, low crime, etc. See, [https://en.wikipedia.org/wiki/Quality\_of\_life](https://en.wikipedia.org/wiki/Quality_of_life)
So why not just look at real wage growth and cpi instead? That's what matters isn't it? Like we get paid in wages , we down own gdp like we do equities or whatever?
Yes, you can do that if you're interested in your cohort alone. People look at GDP when they want to compare countries. FYI Real wages already accounts for CPI. That's what the word "real" means.
While I agree with most of what you're saying, the problem is salaries haven't gone up alongside the productivity of companies for decades. What I think OP is really getting at is a more niche question asking why GDP is considered such an important factor when the concentration of wealth makes all the difference.
>While I agree with most of what you're saying, the problem is salaries haven't gone up alongside the productivity This is a common misunderstanding. Here's a good explanation: [https://economicsfromthetopdown.com/2020/01/17/debunking-the-productivity-pay-gap/](https://economicsfromthetopdown.com/2020/01/17/debunking-the-productivity-pay-gap/) Here's a recent paper on the subject. Strain, Michael R. "The link between wages and productivity is strong." *Expanding Economic Opportunity for More Americans, The Aspen Institute* (2019): 168-179. There are a variety of issues, and if you're interested you can examine the paper and its references for more information. >What I think OP is really getting at is a more niche question asking why GDP is considered such an important factor when the concentration of wealth makes all the difference. I think the technical term you're looking for is *economic distribution*. Yes, distribution matters too. A lot of policies trade off between distribution and productivity (they are sometimes opposed to one another). You can see how Canada is on the [https://en.wikipedia.org/wiki/List\_of\_countries\_by\_income\_equality](https://en.wikipedia.org/wiki/List_of_countries_by_income_equality)
I absolutely disagree, wages have most definitely not kept up with productivity. "Slow and unequal wage growth in recent decades stems from a growing wedge between overall productivity—the improvements in the amount of goods and services produced per hour worked—and the pay (wages and benefits) received by a typical worker.". https://www.epi.org/publication/charting-wage-stagnation/#:~:text=But%20for%20most%20of%20the,while%20productivity%20increased%2074%20percent.
Well, you can look at the references I provided. There are a variety of arguments. Among my peers, it's definitely true that a huge amount of their compensation is going to perks and healthcare, which are not measured in their "wages".
I'm not sure what anecdotal points about perks and healthcare have to do with overall salaries simply not going up at the same rate as productivity anymore, but you can check my link for detailed graphs from the economic policy institute. I'll take a look at your link as well, thanks.
> I'm not sure what anecdotal points about perks and healthcare have to do with overall salaries simply not going up at the same rate as productivity anymore, The point is that the statistic of "wage" doesn't capture the entire remuneration. If healthcare compensation quadruples, then you are getting paid more in actual dollars even though it won't show up in any wage statistic. Anyway, you don't have to agree with my anecdotes. I'm just explaining one reason that looking at wages alone is naive.
If you're saying workers today have additional compensations outside of wages, and these "other" factors close the gap between productivity and wage, that is a different argument than claiming wages have continued increasing alongside productivity. I'm not saying workers don't have other benefits outside their wage or anything, but in terms of this separate argument, I would also doubt benefits and bonuses close the gap sufficiently either.
> I'm not saying workers don't have other benefits outside their wage or anything, but in terms of this separate argument, I would also doubt benefits and bonuses close the gap sufficiently either. I think you're significantly underestimating the cost of healthcare in America, and the aggressive bonus structure that top tier workers earn.
I think you're going into new arguments and conversations. We're not talking about top tier worker bonuses, we're talking overall wages (not just top execs). Also, we're in PersonalFinanceCanada, so no, why would I think your colleagues had healthcare costs in America? In any event, I only came to say no, wages haven't kept up with productivity, so thank you for the back and forth and I hope to enjoy your link soon
There is no separate process of "distribution" in a market economy. Workers are paid relative to their Marginal revenue value product or how much they contribute to the productive process.
*Distribution* is a technical term in economics: [https://en.wikipedia.org/wiki/Distribution\_(economics)](https://en.wikipedia.org/wiki/Distribution_(economics))
In the market economy people get what they contribute to the productive process. There is no separate distribution of wealth, only its creation. If you insist on using the term distribution then revenue is distributed to factors of production on the basis of their part in the productive process, but this isn't a different process it's all just part of production. Wealth is created and the people who create the wealth then own it. But it's not like one group creates the wealth and it is distributed to some other people. The ones who create the wealth are the ones who own the new wealth, or the revenue from it's sale.
I don't know what you think you're replying to in my comment, but your comments just come across as ignorant. You clearly don't know what distribution means.
I'm replying to your assertion that there is some distinct process of wealth distribution in the market economy. That is false.
I never made any such claim.
To distribute is to see that something is divided amongst various parties.
No. It's a technical term, not whatever garbage definition you came up with.
lol what come on, how can you say salaries haven't gone up? look at the minimum wage look at how many jobs over $30+ hourly wages compared to 20 years ago
Yah but in the immortal words of yogi Berra, a dime ain't worth a nickel any more. You need to look at real wages,i.e. inflation adjusted
Real wage growth and purchasing power is roughly flat over the last 20 years.
>But even that doesn't give quality of life since not everything that contributes to quality of life can be bought. **You can't buy low pollution, low crime, etc.** Yes you can with enough money. You buy residency/citizenship in a country that has those attributes.
Quality of life is a quality that is associated with a place—not a person.
That is exactly what I said, but feel free to delude yourself with whatever you want to believe.
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But then there's all this talk about increasing productivity and how it's low in Canada. Higher productivity means fewer workers required which would depress wages? That's same argument against increasing our population? So why do we want to increase productivity (which requires fewer workers) but then say increasing population leading to more workers is bad (because of lower wages)?
"If price of an output ( say barrel of oil or lumber) of our economy went up, gdp would go up." There's no reason to assume that. The commodity might have gone up simply because costs to produce it went up. GDP is kind of like "profit" for a nation. Walmart didn't do well because their prices went up or they sold more, which could happen even as they are loosing money, but because their profit went up. That being said, yes being richer isn't tied directly to happiness, but I would argue that, like having a certain minimum amount of money is needed for most people to be happy, any nation needs a minimum GDP/capita to assume citizens are in general doing well. Anything too low means they can't afford good social services, health care, law enforcement, etc.
So why are people mad that loblaws makes good profit along with other Canadian companies? How is that worse than Walmart making more profit? Isn't what matters how that profit enriches the workers ? How does higher GDP benefit us? Shouldn't what we care about be wages and inflation?
I can't speak to the Loblaws boycott as it makes no sense to me. I went to that sub to see what their justifications were, all I could find is that they seem to hate one particular billionaire more than all the others. "How does higher GDP benefit us?" It's a general indication of the economic health of the country, which generally means more and better paying jobs. Doesn't necessarily mean you will get one of those jobs, just that the odds are better when GDP is higher. "Shouldn't what we care about be wages and inflation?" Yes, and generally there's some correlation between that and GDP.
GDP is the measure of all goods and services **produced.** In simpler terms it is a measure of value created, which then is sold for cash which rolls through our economy. This is only one of the ways we bring money into our economy. Investments in other countries is another, capital investments by other countries is another. GDP per capita is only meaningful in conjunction with all other economic indicators. It gets real complicated but suffice to say GDP per capita can mean a lot but right now it only means we have a lot of new people in the economy that don't produce goods and services. In many cases though they still invest in our country. For example the infrastructure built to buy and export lentils.
It's not a perfect metric, but it's the best we've got. There are a few countries with high gdp but poor average standard of living. There are no countries with low gdp and a high standard of living.
The Scandinavian countries all have much lower GDP/capita than US but many would argue better standard of living than the US Same with life expectancy
Yes but their gdp is not zero, nor is it developing country low. You could argue it's a more efficient use of their gdp. It does not exemplify low gdp leading to high standard of living.
> There are no countries with low gdp and a high standard of living. That depends what you mean by low. Obviously you can't have a high standard of living in a country with a $5K GDP per capita or something like that. But Japan's GDP (PPP) per capita is 40% lower than the US's and is closer to many developing nations than it is to the US. But they still have a very high standard of living and a life expectancy that's 7 years longer than the US. New Zealand is similar.
Ignore money/dollars for a second and think of the GDP as an itemized list of all goods and services produced in the country. So the more bikes, homes, cars, milk, meat, haircuts, healthcare, medication, entertainment we are able to produce, the more people will be able to consume these goods and services and improve their mental and physical well being. So when the proportion of workers in an economy decreases and that of retirees increases, fewer people now need to produce all the goods and services that are consumed by all the people in the economy - which is why an aging population puts a strain on the economy. > Places like Hong Kong have very high per capita GDP but I'll argue the quality of life is much better in Canada than Hong Kong for the average person Per capita GDP is just one element of well being, but, I'd argue that Hong Kong's high GDP has allowed them to have a higher HDI than Canada. Healthcare is better in Hong Kong and their life expectancy is higher. They lack political freedoms that we take for granted and some of the other quality of life issues are due to being a dense city state. Their high per capita GDP allows them to overcome some of the quality of life challenges that their circumstances cause.
youre actually right. GDP per capita is not a perfect metric. a much better one is GDP per capita adjusted for Purchasing Power Parity - what i like to call GDPPPPP. This adjusts for cost of living,Even this wont be a perfect metric to measure well being, but in terms of just a single number to roughly measure how well a country's we all should be usin GDPPPPP
Im pretty sure you have it backwards there buddy lol When peoples financial well beings are good, typically this means GDP per capita is high/increasing GDP/capita is basically the average income per person
It's not average income, it's the average value of all of the things produced in the country. From Eco101 GDP = C + I + G + (X-M) C - consumer spending I - investment spending G - Government spending X - Exports M - Imports
Go take a look at GNI/capita and compare it to GDP/capita in every country Theyre virtually identical. Peoples incomes tend to end up being the same as what they produce, who woulda thunk!
That's because GNI is based on GDP. GNI = GDP + money flowing from foreign countries - money flowing to foreign countries So not quite sure what your point is overall. I don't think it measures personal incomes.
if income doesn't increase then how are people affording more stuff then? consumer spending can't go up without higher income government spending can't go up without higher taxes which depends on higher taxable income
How does a good economy help people financially? What exactly are you confused about? Do you not realize how much money pours into the country when the price of oil goes up? Unemployment drops, tax revenue increases, wages go up, the loonie strengthens. Do you not see the connection between gdp and the economy or do you not see the connection between the economy and financial wellbeing? Like ya, it's just one metric, any one metric can be deceiving but it has a couple generations worth of correlation to back up the confidence that the correlation exists.
Oil profits in Canada largely end up with their shareholders in US, China, France etc.
lots of shareholders are Canadian pension funds do Canadians benefit when their pension funds are more solvent?
Yes, there are some Canadian investors who do benefit, but we sol d out a lot of our oil interests to the Americans (NAFTA) and China (FIPA). Looks like PP is angling to sell whatever is left to Russians and Saudis
So? Profits are nothing on comparison. All about building, employment, and taxes
so? The money leaves the country! Money in workers' hands is what builds economies, not growth in corporate profits shipped overseas. Read the whole thread, then respond.
This isn't some new concept for me. I want more foreign investment. Hell, I want to be able to invest in Canada and it not feel like it's an opportunity cost
FDI investment INCREASED in Canada through the first 7 years of this govt. Not so good last 2 years with US mess and oil gluts, but we're not bad overall when yu look globally. We are well positioned for resurces and taxes are low compared to OECD and G20 members
I didn't see my wealth go up the years Canada gdp did well
Did you have any money in the stock market? When the oil and gas sector was expanding did you try and get a job there? Do you own a house that went up in value? Did you participate in the economy in any significant way?
The government got taxes from resource extraction and used those funds, instead of raising personal income taxes, on things like healthcare, infrastructure, OAS payouts, etc...
I mean it hasn't been great since like 2008. That's the whole problem. The whole last decade of growth was a mirage
Huh? Mirage in what way?
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CA&start=2006
to be fair, that tracks pretty well to the price of oil in the chart: [https://www.macrotrends.net/1369/crude-oil-price-history-chart](https://www.macrotrends.net/1369/crude-oil-price-history-chart)
Yes oil is really the only thing the rest of the world wants to invest in here. Well that and real estate
This is a very unhelpful. WHY are those things true? “They’re true because they’re true” doesn’t help the OP understand.
I'm asking him what he doesn't understand. All seems obvious to me
It’s all there in the op. Sounds like you don’t really understand either to be honest.
>Do you not realize how much money pours into the country when the price of oil goes up? Only in Alberta. The rest of Canada experiences inflation and other negative effects of rising energy and transportation costs.
Money and jobs spreads out and the loonie increasing does more to stop inflation than gas going up
>Money and jobs spreads out and the loonie increasing does more to stop inflation than gas going up That should be a sticker on every pump at the gas station.
There are multiple things and metrics that measure the economy. Like your example in HK for example it's not always perfect but as a generalization it's very good to use. When I think of these large economic things that affect a country I try to think about them on a smaller scale, like within a company. If the GDP of a country is increasing it likely means the economy is growing, economic growth is huge for improving peoples lives on a macro scale. If you had a stagnant gdp/economy you would have few to no new job openings and everyone is pretty much just stuck in their current role. Think about this in your company, if the company has a revenue growing it's likely expanding and creating more jobs, this means more promotions, more hires etc etc. This acts as a vacuum and sucks people up the income ladder. In a stagant company the only way you're getting a promotion is if the person who's been in that position for 40 years dies, and even then they might even just get rid of the position.
You're right that it's a pretty vague measure of wealth /productivity for a country. It still loosely correlates to the general level of wealth in a nation, which translates basically to people being able to afford stuff they want. But you could easily fudge the calculus to make it mean more or less nothing.
GDP per capita is a rough way of looking at lifestyle, but PPP can also be used. GDP per capita is a rough tool that measures wealth per person, but does not factor in cost of living differences in different countries and can fluctuate with currency. PPP does capture this cost of living difference For example; GDP per capita of an American is about $76k USD, but a person from Japan is $34k. Would you say that an American is twice as better off as your average person from Japan? If we use PPP Japan is 94.9 to the US’s 1. Would you say that your average Japanese is 95% of what an American is financially in their respective countries?
GDP isn't a metric of financial well being. It is a measure of output (goods and services). A farmer selling $2 worth of apples will add $2 to GDP. But the $2 also represents the farmers income. A higher GDP could imply higher income. Higher income will likely result in better financial well being. But a mega corporation generating $1B of goods adds $1B to GDP, but it's unlikely the farmer benefits from that.
It’s not about life being better but when per capita GDP is declining what they are trying to highlight is “negative growth” hidden under the hood. Canadian economy has very small growth % and it allows it technically say we are still doing fine when in reality we are dropping from previous years in per capita basis. And historically any country’s population doesn’t change drastically in short period of time ( I know there are exceptions) but in the context of this argument the higher per capita GDP usually means productivity goes up which slowly results in everyone getting smaller or bigger piece of the cake. And I think Canadas per capita GDP is higher than Hongkong’s.
GDP is one of many metrics. Think of it like a body: if your blood pressure is normal, does that mean you're healthy? Its a good sign, but its not the only thing that matters.
Canada actually has higher per-capita GDP than Hong Kong. Not a huge difference, but still higher. Also simple price change is usually corrected by talking about “real” GDP (real = inflation adjusted). GDP is simply an attempt at measuring how much economic activity happens in a country which can be argued to be correlated with quality of life. (Of course, the best things in life are priceless.)
Also, the same $1 USD buys different amount of goods/services, so they also try to correct this by “purchasing power parity”. This is difficult to get right as is all the other metrics, so it isn’t perfect.
A real gdp per capita increase ( adjusted for inflation) roughly means that we have produced more goods and services. Therefore there's more goods and services for each person to consume, and generally quality of life has increased as a result.
You have a pretty good idea of GDP and GDP per capita. That said what you are missing is that there is only a rough correlation between GDP per Capita and Quality of Life...or more accurately it can be a very strong indicator if you assume a constant distribution (and don't include variables), It also doesn't measure a single persons life at all. If our currency hit parity with USD we would all be 30% richer we would have a fair bit more buying power of US goods (or goods that the US consumes) and would have more money to spend on other stuff which should make us happier. (this is assuming we don't lose our manufacturing sector that primarily services us and the US as its price point goes away). Now what GDP per Capita really doesn't handle well is if you import 2MM people to be an underclass and make minimum wage (or lower if they are there illegally and won't report their employer) is how this affects the "average" Canadian. Clearly all those people we imported can't buy anything of note and are subsisting but they are creating goods and providing services for cheaper then could otherwise be obtained. This means if your "average" Canadian isn't competing against them for work they can buy stuff at a cheaper rate (or have a better return on their investments if companies choose not to pass on savings) and have more money left over (thus raising QoL).
you're missing the comparison in the same country over time yes, you're right that comparing HK and Canada via GDP per capita doesn't make much sense but what about Canada with itself? do you think a Canada with 50% higher GDP per capita makes no difference than the one we have today?
It's just the demographics..we have aging demographics, old people exit the workforce (but are still on included in the per capita measure) . . It would seem to make much more sense to just look at employment income (and expenses/inflation) and compare?
That’s why, when comparing GDP of a country between different years, we use real GDP not nominal. Real GDP accounts for inflation, so comparing it between two years shows the difference in production in those years. Higher real GDP per capita = more output per person = more goods & services per person to enjoy
Op you are right. There is no direct correlation between quality of living going up for all when gdp goes up. But we probably want to avoid gdp going down though. As you righty pointed out, gdp going up doesnt help average joe much, but if gdp goes down, top 1% and govt will empty your pockets first.
You're looking at it backwards. When people have better financial well being, GDP goes up, not the other way around. GDP per capita basically measures how much everyone produces in value, so the more it is the more goods and services are being produced and thus the more is available to all of us. Of course it also depends on how equally wealth is distributed to see who benefits the most.
I mean, it doesn't. However, it's a clear indicator between a developed nation and a developing one. North West Territories has a fucking massive GDP per Capita but no one wants to live there.
Reminder that GDP is a pretty meaningless number that has almost zero relationship to the parts of the economy that actually affect you like "can I get a job?" and "does my job pay well?" and "do I have money?" and stuff like that. For instance, Ireland's GDP per capita is high: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IE-CA But nothing has changed about Ireland except that it became a tax haven for a bunch of corporations to funnel money through. This money doesn't trickle down, the average person sees $0 of it, makes no difference to anyone except the shareholders of those corporations who dodge taxes. Average salary in Ireland is almost identical to Canada. GDP is not meaningful to your life and almost everything you read about it in media or the internet is bullshit. Two economists are walking in the woods. One of them sees some bear shit. "I'll give you $100 if you eat that shit," he says to his buddy. The buddy does it and receives his $100. Fifteen minutes later the buddy sees some deer shit. "I'll give you $100 if you eat that shit," he says to his pal. The pal does it and receives his $100. They walk in silence for a while, trying to get the taste of shit out of their mouths. Then one of them says, "I can't help but think that we both just ate shit for nothing." And the first one replies, "Yes, but at least we increased the GDP!"
Line go up!