Posted on 03/21/2008 1:31:33 PM PDT by reaganaut1
WHICH economy has enjoyed the best economic performance over the past five years: America's or Japan's? Most people will pick America. The popular perception is that America's vibrant economy was sprinting ahead (albeit fuelled by credit and housing bubbles that have now painfully burst), whereas Japan crawled along at a snail's pace. And it is true that America's average annual real GDP growth of 2.9% was much faster than Japan's 2.1%. However, the single best gauge of economic performance is not growth in GDP, but GDP per person, which is a rough guide to average living standards. It tells a completely different story.
GDP growth figures flatter America's relative performance, because its population is rising much faster, by 1% a year, thanks to immigration and a higher birth rate. In contrast, the number of Japanese citizens has been shrinking since 2005. Once you take account of this, Japan's GDP per head increased at an annual rate of 2.1% in the five years to 2007, slightly faster than America's 1.9% and much better than Germany's 1.4%. In other words, contrary to the popular pessimism about Japan's economy, it has actually enjoyed the biggest gain in average income among the big three rich economies. Among all the G7 economies it ranks second only to Britain (see left-hand chart).
(Excerpt) Read more at economist.com ...
Immigration is more likely to boost GDP per capita if the immigrants are highly skilled. The one good feature of the failed immigration bill was a point system favoring such people. This idea was generally supported by the Republicans and opposed by the Democrats.
Most people, of course, do not think about GDP, per-capita or not, but they *do* notice whether their income is rising or falling. Average income will be more correlated with GDP per capita than absolute GDP.
bump.
Shhhh..you’ll upset the Bushbots.
Interesting.
Is there anyone, besides traders, that think there is a lack of confidence in our economy that’s the driving force behind this recent decline?
Too funny, only to the left wing socialists is a shrinking population an economic good.
>> Is there anyone, besides traders, that think there is a lack of confidence in our economy that’s the driving force behind this recent decline?
I don’t think it’s THE driving force, but I strongly agree that the whole confidenct thing is a SIGNIFICANT force.
As far as that goes — I’m wondering why the Euro is so strong relative to the dollar. With the possible exception of debt, I believe that the structural problems in the Eurozone are as bad as or worse than the US. And GDP per capita — the focus of the posted article about Japan — in the US is significantly HIGHER than in the Eurozone.
I’m planning to invest a little time in serious research on this issue.
Some say it’s a good time to short the Euro vs. the Yen.
I think the time is coming “soon” (whatever soon means) to short the Euro vs. the US$.
It’s a good economy that produces confidence not the other way around. The economy is the result of millions of individual decisions based upon individual circumstances. When a collective judgement is arrived at it’s usually pretty accurate.
I saw the title and thought someone posted another Heather Mills photo...
But don't worry...as the growthhounds will tell us, we just keep growing the population and the debt-per-capita will drop even as we borrow more! Pretty soon we can be paying $5000 a month for a tenement and the economy will be humming right along!
And also, none of those durn stay-at-home moms will be able to keep out of the economy, so we can get more of a boost to our GDP number as they enter the workforce and we hire more immigrant child-care workers! HOORAY! What a wonderful world!
In fact, we could probably print a bunch more money and go invade a few more countries! I can't believe those anti-American naysayers who claim we should live within our means!
</sarc>
Or we could sing TEOTWAWKI, wear Nikes and call Jack Kevorkian in for the kill.
With a declining population, GDP per capita can be rising, while the economy is actually shrinking. This article is missing the point. The higher GDP per capita is actually a sign of decline.
Apparently the people who loan money think there is. Try getting a mortgage in FL. Probably as difficult in NV or CA. Slightly less difficult elsewhere.
Or we could do things the smart way.
Sure, that’s what we have been doing for 22 decades here, at least off and on.
Try not to get stuck on "growth" as a requirement for health--that's called bloat-think. Besides, Japan's GDP is going up, even as its population is going down. In the modern global economy, efficiency helps.
Planning to ride your Conestoga out past Hawaii?
Nope. You?
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