Leer en Español
In economics, GDP (gross domestic product) is defined as “the total value of goods produced and services rendered” in a nation in a given year.
If you’re not a student or professor of economics, you probably don’t hear much about GDP, unless the trend is negative and a country is in recession (defined as two consecutive quarters of negative growth) or, worse, depression. However, GDP is one of the best metrics we have to measure economic growth and standard of living.
Although I am not a professional economist, I have always been fascinated by GDP numbers. I attribute this in part to my love of professional sports, a field in which statistics have long been used, but have now developed far beyond the traditional metrics we once used to judge our favorite players. In baseball, for example, three different formulas are now used to determine a player’s WAR (wins above replacement.)
Who was the best player in MLB last season? As a Brewers fan, I might answer Christian Yelich. The young California player won the NL MVP award and led Milwaukee to a World Series game. However, WAR data shows that Yelich was more than three points behind Red Sox slugger Mookie Betts, meaning Betts was worth three more wins than Yelich.
In a way, GDP is comparable to WAR. It’s a metric that tells us whether one nation is performing better economically than another.
I bring all this up because Visual Capitalist recently shared one of the best charts I’ve seen on GDP.
The animation, according to Visual Capitalist, is by Jaime Albella. It provides a fascinating breakdown — actually, it’s more of a race — illustrating GDP growth over the past 57 years for the 10 largest economies in the world. Viewers can see how nations accelerate, slow down and regress. It’s like watching NASCAR, but even more fun (assuming you like economics more than NASCAR.)
I’m tempted to offer conclusions about the video, but I don’t want to spoil anything, so just watch the video and be amazed. It will be the coolest thing you see today.
Foundation for Economic Education (FEE)