to what extent is gdp per capita a useful measure of economic development

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To what extent is GDP per Capita a useful measure of economic development?

Gross Domestic Product (GDP) is considered by most economists to be the principal indicator of a nation or region’s wealth. Alongside, GDP per capita is the most important measure of individual economic welfare. Gross domestic product per capita is one of the measures of national income and output for a given country's economy. It is the total value of all final goods and services produced in a particular economy; the dollar value of all goods and services produced within a country’s borders in a given year. High levels of, and steady growth in, both GDP and per capita GDP are primary aims of economic policy.

GDP is relatively straight forward and therefore widely understood. Secondly it is a well established indicator and one that is available for almost every country in the world, so that it can be used to compare income levels across countries. This means that it can show a measurement of economic development which is easily understood by many people and that it can compare economic growth either 1) across several countries and measure the change across this or 2) over several years for many specific countries if wished to do this way.

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However there are many critics and criticisms of GDP per capita in measuring economic growth as it does not take into account other elements which are important in explaining well-being, and thus leading to a number of people have begun to challenge the power of this measure, pointing out its insufficiency and proposing alternatives.

A country’s GDP may grow at a very fast rate and yet only a small proportion of its population could be the benefices of such growth, while the masses of its population may not experience any improvement in their standard of living. There ...

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