Nominal GDP growth rate ignores two important factors when evalulating the well being of an economy. The first is that it is ditorted by the price factor since high inflation country tends to have a larger nominal GDP. Secondly, it does not consider the population growth. If population outgrows GDP, people are actually worse off.
Nominal GDP growth rate ignores two important factors when evalulating the well being of an economy. The first is that it is ditorted by the price factor since high inflation country tends to have a larger nominal GDP. Secondly, it does not consider the population growth. If population outgrows GDP, people are actually worse off.