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  • malagupta1918

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    5 months

    On the limitations of nominal GDP per capita in USD

    It’s not a good metric for development and it can be deceptive and obfuscate growth. For instance, I made this post: https://www.reddit.com/r/AskEconomics/s/5ZKFoBQEju China’s nominal GDP per capita in USD remained roughly the same for the past four fiscal years despite the economy growing at 4-6% annually. Why? Because the yuan was constantly getting devalued against the USD so the GDP per capita in local currency(Yuan) reflected the growth but not USD. Same principle applies in India: Andhra Pradesh’s GDP, despite growing nearly 2 lakh crore, will be roughly the same in USD from last year to this year. So, until the devaluation stops, it’s better to use GDP PPP per capita.
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