What is GDP, and how are we misusing it?

Gross Domestic Product (GDP), and growth thereof, has been widely used over the years to measure economic progress. But what is GDP, and why does it matter?

Mathematically it is the sum of consumption, investment and government spending (plus exports, minus imports). It is regularly cited in discussions related to the economic health and wellbeing of countries and regions, with some governments such as China going so far as to set specific targets for GDP growth (placed between 6.5 and 7% at the recent National People’s Congress in the newFive Year Plan).

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