A piece in the Economist this week is relevant here, noting that GDP per capita is a better indicator of how rich a country is than overall GDP.
While, for instance, the total US economy has grown far faster than Japan’s in recent years, the US population is strongly growing, while Japan’s has lately started to fall. In per capita terms, Japan has been outpacing the US. People there, on average, have been getting richer faster.
And Britain? As you’d expect, our GDP growth is pretty good by G7 standards, a close second to the US since 2003. But what about our GDP per capita growth? Well, here I have to admit we’re not second:
The Economist also suggests the standard definition of recessions is flawed:
For example, zero GDP growth in Japan, where the population is declining, would still leave the average citizen better off. But in America, the average person would be worse off. A better definition of recession, surely, is a fall in average income per person. On this basis, America has been in recession since the fourth quarter of last year...