When writing about the wide and varied field of economics, there are both national and global economic data to consider. This raises the question: with every nation being both independent and interdependent, with its own unique circumstances and policies, how to compare the economies of different countries?
There are many important tips to consider when discussing different national economies. The good news is that the growth of modern economies has been tracked for a long time, and abundant amounts of economic data exist per nation. While countries have changed over time, along with their economic policies, there is a number of factors to consider for each country to simplify the act of comparison.
Knowing what factors to analyze will allow you to write about different countries and their economies more accurately.
Gross Domestic Product (GDP)
Gross Domestic Product, commonly referred to as a country’s GDP, is the most straightforward way to compare the economic growth of two different countries. The GDP is defined as a nation’s increase in economic productivity or the total value of the goods and services a country produces within a certain time frame. Many resources may reflect a country’s GDP in dollars, so it’s important to employ a currency converter for accurate comparisons between two different countries, such as between the U.S. and Mexico.
There are two approaches to measuring a country’s GDP per capita. The first method is a blanket measure that does not vary from country to country. Another approach is GDP Purchasing Power Parity – a relative measurement that incorporates factors particular to one country. The latter is more useful for accurate comparisons between different nations.
Unemployment Rates
Another way to evaluate and compare two different economies is by factoring in the unemployment rates of each. The unemployment rate is measured by the number of individuals who reported to be unemployed, divided by the total number of individuals qualified to work, or the total labor force. There are other factors within this criteria to consider as well, such as youth employment and long-term unemployment versus short-term unemployment.
Energy Production
The rates of energy production are a useful factor to consider when comparing two different countries. This sort of information includes the percentage of green energy, retail gas prices, the energy used per GDP unit, and energy use per capita. Many different institutions connect economic growth and a country’s energy production. When it comes to the economy, energy sources such as fuel comprise a large portion of the economy, so production and consumption levels are important to analyze.
Health and Education Spending
In terms of the amount a country puts into healthcare, there is a number of different statistics to look at. Health spending per capita can be compared to tangible outcomes in a single society, such as birth rates and death rates. Healthcare costs can place a drain on a country’s economy, as seen in the United States. This makes it an important factor when comparing economies.
The same situation applies to education, which plays a large role in the economy in terms of job training and student loans. Data outputs that can be referenced to each country include information such as literacy rates and marketable job skills.