[rayiner]

> GDP/capita is often a relatively useless metric in modern times.

"Often" is the wrong modifier. GDP/capita aligns very closely with material standard of living for the median person. If you look at the GDP/capita growth in India and China since 1990, or South Korea, Singapore, and Taiwan, since 1950, that reflects very real increases in material standards for ordinary people.

There's two, relatively well-understood situations where GDP/capita isn't reflective:

1) Countries where the economy is dominated by resource extraction or tourism 2) Tax havens

But it's pretty easy to tell whether one of these exceptions applies. It doesn't in the case of Poland, which has a broad, diversified economy with a high level of industrial production.

[somenameforme]

In the past GDP/capita used to track pretty strongly with most of all desirable metrics. So then it became the goal, and it started becoming heavily detached from those metrics - Goodhart's Law in action. For instance since 1979 in the US (first date this was measured by the Fed) real median wages are up about 14% [1] while real GDP/capita is up 118%.

And those values are even more detached than the inequity there makes clear, because for about 90% of that time wages were completely flat (and even declining) while GDP/capita kept booming up up and away. So the connection between the two has become very weak while in the past it was quite strongly connected. And that's just one random example - pick most of all those desirable metrics and it's a similar story. GDP just doesn't track with them so well anymore at all.

And when you try to compare between countries GDP becomes completely farcical as the ability to produce a zillion dollars of services doesn't translate, or even have much to do with, the ability to produce a zillion dollars of things.

[1] - https://fred.stlouisfed.org/series/LES1252881600Q

[standeven]

Isn’t GDP pretty easy to boost with deregulation and government overspending, at least in the short term? Neither of which benefits the people.

[bobthepanda]

You can’t really keep that up over 35 years though, which is what Poland has achieved.

[philwelch]

Deregulation does benefit the people, at least if it's done in ways that lead to sustained economic growth.

[mejutoco]

> GDP/capita aligns very closely with material standard of living for the median person

GDP is an average, not a median, so it might align with the average person, not the median. The average/mean can hide many things (see Anscombe s quartet) which is one of the problems with GDP IMO.

[rayiner]

It depends what you’re using the data for. If you’re comparing across countries, or looking at a developing country over time, it’s a relatively small factor. The ratio between the average and the median isn’t that big even in the U.S. (about 1.3). Meanwhile, Poland’s GDP per capita has tripled since 2005: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location....

[mejutoco]

> The ratio between the average and the median isn’t that big even in the U.S. (about 1.3)

Being off by 30% might not matter for some usages, but it is not a small amount. It seems the median is more accurate to report and we agree.

[dhosek]

I don’t know that there is any way to calculate a median value of GDP/capita. You can look at income distributions and find a median income and compare that to a mean income, which could allow an estimation, but beyond that, GDP is an intrinsically composite number which cannot be easily (at all?) broken down to individual contributions. I assume income is what the parent commenter is basing the median-mean comparison on, but it’s kind of out of nowhere with no explanation.

[rayiner]

For purposes of comparing countries to each other and the same country over time, it’s not 30% off. The average skews higher than the median everywhere, so it’ll be 1.3/1.x.

If you have reported median incomes that are calculated the same way across countries and over time, that would be better. But many countries don’t reliably track that data, and the ones that do calculate it in completely different ways.

[mejutoco]

That all sounds reasonable. My concern was with your quote

> GDP/capita aligns very closely with material standard of living for the median person

GDP per capita is an average. This means it does not align with the _median_ person, but with the average. I believe this is factual and undeniable. No doubt it is interesting too to try to find other metrics for different usages as well.

> For purposes of comparing countries to each other and the same country over time, it’s not 30% off

You said the ratio for the same country between gdp mediand and average is 1.30. That means it is 30% off. Again, we can keep moving the goalposts and I could agree, but for the quoted statements i believe the above is true.

[rayiner]

> GDP per capita is an average. This means it does not align with the _median_ person, but with the average. I believe this is factual and undeniable.

That’s why I used the word “align” instead of the word “is.” If the ratio of mean to median is 1.3, if the mean doubles, the median also will double—the movement of the two values will be “aligned” even if one is offset from the other.

That means when you’re talking about the economic growth of a country, Poland in this case, the mean is a reasonable proxy for the median unless there has been a massive change in the ratio of the median to the mean.

[hollerith]

Replacing the average with the median is not some brilliant move that clarifies any question about an economy. For example, reducing the income of the bottom 49.9% of society to zero would not affect the median income at all.

[Ygg2]

When economy goes K shaped (only ultra rich or ultra poor with no in-between) GDP is good preidictor of how the ultra rich are fairing.

For everyone else a roulette wheel is a better measurement.

[rayiner]

No economy is K shaped. The vast majority of US income (78%) is earned by people outside the top 1%. It was as high as 90% during the bad economy of the 1970s. Since 1975, real GDP per capita has increased by a factor of 2.8. So the proletariat have 12 percentage points less of a number that’s 2.8 times bigger.

[Ygg2]

Sure there are. US economy is K shaped. You either become rich or end up poor.

It's economy geared for the rich. Where poor only exist to give rich a confidence boost.

[rayiner]

You: "US economy is K shaped. You either become rich or end up poor."

Reality: "The vast majority of US income (78%) is earned by people outside the top 1%."

[Ygg2]

Your data is wrong. Highest quantile earns +50%

https://www.statista.com/statistics/203247/shares-of-househo...

But Rich also account for majority of consumed goods purchased.

Also why did Travel, Entertainment and Food services suffered during post COVID recovery?

Why are McDonald's and other fast food joints that upped their price enjoyed a surge in value, when supply and demand tells otherwise.

https://youtu.be/b1sKlSJ0Czk