I am just a lay person confused about why GDP is a good measure. For example, in the news, it is always reported that GDP grew in the last quarter etc., or China is the only country experiencing GDP growth during the pandemic (may not be true), the implied understanding being that GDP and GDP growth matters a lot.
However, I think it is not a good measure for a few reasons.
- It is not a good measure of the military strength of a country.
My understanding is that GDP is a measure of how powerful a country is. In 1940s, a country with the greater GDP would be the country that would win a war.
For example, consider steel production. It's a measure that tells you which country is stronger and more likely to win if a war broke out between them during WW2.
If both countries are entirely producing similar things that are important for industry e.g. steel and food, then GDP would be a fair measure that gives you accurate comparison between these countries.
However, I feel GDP is not a reliable measurement in that regard. For example, a country may have higher GDP but its GDP might consist of entirely non-industrial things, like video games, or in game items. If a war broke out between this country and another country with lower GDP but produces industrial things, they would not win.
- It calculates monetary value but not actual amount
Suppose I am coder and before I wrote 1000 lines of code in a day of work and sold my service for \$100 a day. Now I write 10000 lines of code but I still work for $100 a day. The actual amount of thing that is produced and consumed has increased but the GDP is unchanged.
Would greatly appreciate any clarifications.