Why is the world so much obsessed with per capita GDP?
Its gives us an illusion that population is the limiting factor for every nation. However we very well know that in most countries 5-7% unemployment is considered healthy. Also if you are as rich as USA/Western Europe then one of the major concern of the country is to limit the population influx and keeping illegal immigrants under check. So essentially a country can always increase its workforce.
So what is the most limited of all resources… LAND.
In the paper Geography and Economic development the authors John Gallup, Jeffrey Sachs and Andrew Mellinger plotted the GDP per unit land all over the world.
Notice how prominent are the rivers like the Ganges and the Grand canal in China in this plot. The plot reinforces our conviction that most wealthy cities are ports which are close to the sea/inland waterways and hence the wealth of the nation is a function of the connectivity and influx of man and goods.
What i could not stop wondering is that how close this graph is to the night sky of the Planet Earth. So its like the Big Mac Index. The economist can spend a year collecting data and crunching it, or just take a picture and get a fairly accurate answer. After all the more prosperous you are, the more outdoor lighting you need.
10 replies on “GDP density”
Excellent observation Ankur.I agree wholeheartedly. Every great Civilisation and most great cities were founded near river systems and a lot many also died out when the rivers dried up or changed course.
Per capita GDP is also a outdated measure because it doesn’t take into account that most times in almost every country even socialist/marxist ones a much smaller portion of the population own a huge chunk of wealth compared to the rest of the population i.e., the middle class and/or the poor.
This is really nice Ankur!
How’s business school treating you? 🙂
there is a wonderful Gini index http://en.wikipedia.org/wiki/Gini_coefficient that measures the inequality. BTW did you know that India and Russia have the highest number of Billionaires per unit GDP of their nation.
life is hard, but i am doing well… lets c how much the recession effects the job market
Well, the recession may have affected the job market – but business school is not going to make you or your knowledge obsolete!
wow ….nice post dude. .
thanks man.. good to c u after such a long time
im out of country and busy as hell
this analysis is very interesting and this has been so right since the dawn of civilization
is what i guess
wow.. so where r u presently located
Great work Ankur. I was wondering if you could provide the sources for both the pictures mentioned in the blog.
Thanks and welcome to ENagar.
Plz go through the paper on “Geography and Economic development” by John Gallup, Jeffrey Sachs and Andrew Mellinger (link inside the text) for in dept analysis and reasoning.