{"id":3600,"date":"2016-11-21T17:33:32","date_gmt":"2016-11-21T22:33:32","guid":{"rendered":"http:\/\/162.223.13.186\/~zacksim\/is-slow-gdp-growth-threatening-americas-prosperity\/"},"modified":"2022-02-26T13:20:47","modified_gmt":"2022-02-26T13:20:47","slug":"is-slow-gdp-growth-threatening-americas-prosperity","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/is-slow-gdp-growth-threatening-americas-prosperity\/","title":{"rendered":"Is Slow GDP Growth Threatening America\u2019s Prosperity?"},"content":{"rendered":"

Gross Domestic Product measures the goods and services produced in an economy annually and is generally seen as an essential metric when measuring the stability and prosperity of a country. With that, America\u2019s low GDP growth has sparked worries. But, we may be ignoring facts which lend a less gloomy picture.<\/p>\n

U.S. GDP annual growth rate in the 50-plus years up till 2008 averaged +3.5%. This dropped to +2.1% over the last six years. Nevertheless, it\u2019s still in the positive territory, having bounced back quite nicely after the Great Recession. And, the growth rate as of 2015 is higher than rates of the advanced economies of the U.K., Japan, France and Germany.<\/p>\n

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Data Source: World Bank<\/em><\/strong><\/span><\/p>\n

Moreover, an advanced\/developed economy that ranks amongst the largest in the world can grow only so much after a certain point. For such economies, what matters more for the long-term is how the wealth is allocated. America\u2019s median income as of 2014 was 4% less than that in 2000, notwithstanding positive economic growth (barring two years) during the period. Also, there are still around 43 million people living in poverty in the country\u00a0(According to The Atlantic). This indicates distributional issues in the U.S. But we see progress as the nation has managed to edge past France, Germany, U.K., Japan and the world, in terms of per capita GDP growth in 2015 (According to World Bank).<\/p>\n

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Data Source: World Bank<\/em><\/strong><\/span><\/p>\n

Also, GDP\u2019s position as the yardstick of economic growth may be debatable. It\u2019s a volume-centric metric, and therefore, could underestimate the quality of output. That could be a hurdle in assessing developed nations\u2019 performance, since their GDP volumes already rank among the largest in the world and therefore, it is factors like quality and functionality of products that determine these economies\u2019 progress on the global platform.<\/p>\n

Some instances that show how GDP may not be sufficient to gauge an economy\u2019s growth\/potential:<\/p>\n