Master in Applied Economics, University of Antwerp

Master in Applied Economics, University of Antwerp
Copyright Mark Van Couwenberghe, 2017 GENERAL ECONOMICS 6 Mark Van Couwenberghe Teacher in Economics Master in Applied Economics, University of Antwerp Masterclass in Strategic Account Management, Erasmus University of Rotterdam

CLIL Copyright Mark Van Couwenberghe, 2017 Exciting moment! You are now about to start your second year in CLIL Economics! Using CLIL will reinforce your learning process! How do you learn? Start: discover new subjects! Theory: understand and explain economics and economic topics in your own words Research: develop your critical thinking Exercises: practice = must Extra exercises: practice even more = challenge Texts: make link with economic reality What is crucial? Dare to speak! Use your own words! Try to use correct English!

INTRODUCTION: GDP as measure of wealth
Copyright Mark Van Couwenberghe, 2017 INTRODUCTION: GDP as measure of wealth

OVERVIEW 1. Economic activity
Copyright Mark Van Couwenberghe, 2017 1. Economic activity 2. The concept of Gross Domestic Product (GDP) 2.1 Gross Domestic Product (GDP) 2.2 Gross National Product (GNP) 2.3 Statistics 3. GDP calculation approaches 3.1 Production approach 3.2. Income approach 3.3 Expenditure approach start theory theory GDP AS MEASURE OF WEALTH Overview

5. Shortcomings of GDP as a measure of wealth 5.1 Shortcomings
Copyright Mark Van Couwenberghe, 2017 4. Nominal and real GDP 4.1 Nominal GDP 4.2 Real GDP 4.3 GDP deflator 5. Shortcomings of GDP as a measure of wealth Shortcomings 5.2 Alternatives 6. Using GDP to compare wealth of countries 6.1 GDP per capita theory theory theory GDP AS MEASURE OF WEALTH Overview

9. Extra exercises 10. “The world’s 10 biggest economies in 2017 “
Copyright Mark Van Couwenberghe, 2017 7. Assignment: country comparison 8. Exercises 9. Extra exercises “The world’s 10 biggest economies in 2017 “ “These are the 30 wealthiest countries in the world.” research exercises exercises texts GDP AS MEASURE OF WEALTH Overview

CLIL curriculum objectives
Copyright Mark Van Couwenberghe, 2017 To define and explain GDP as a measure of wealth To calculate GDP following 3 approaches To explain difference between nominal and real GDP To critically evaluate GDP as a measure of wealth Explain shortcomings Define and explain alternative measures To compare wealth between countries CLIL language objectives To master and correctly use the GDP concepts in English To explain and apply the GDP theory in English, in your own words To perform research, read and build critical views on GDP topics in English GDP AS MEASURE OF WEALTH

Copyright Mark Van Couwenberghe, 2017
1. Economic activity An economy is the whole of transactions taking place between different “economic actors”, such as: households governments banks companies world GDP AS MEASURE OF WEALTH Economic activity

Write-down examples of economic transactions using the simplified “economic flow” below: GDP AS MEASURE OF WEALTH Economic activity

2) The “owners” of the production factors receive an income:
Copyright Mark Van Couwenberghe, 2017 Summary: 1) Households supply the production factor ………………… to the companies. Company owners (or: …………………… ) supply the production factors …………………… and …………………… to the companies. Companies combine these 3 production factors together with another production factor, ……………………, to produce products and services. 2) The “owners” of the production factors receive an income: production factor income GDP AS MEASURE OF WEALTH Economic activity

3) The income can be used for different purposes.
Copyright Mark Van Couwenberghe, 2017 3) The income can be used for different purposes. Households use their income for ………………… or for ………………… . Companies use their income for ………………… or for ………………… . So, in a basic economy, there are 3 different approaches to economic transactions: The question is: how do we measure the “value” of an economy? PRODUCTION INCOME EXPENDITURE GDP AS MEASURE OF WEALTH Economic activity

2. The concept of Gross Domestic Product (GDP)
Copyright Mark Van Couwenberghe, 2017 2. The concept of Gross Domestic Product (GDP) 2.1 Gross Domestic Product (GDP) The “value” of an economy is measured through its “Gross Domestic Product” (GDP). Gross Domestic Product (GDP) is the aggregate and monetary value of all finished products and services that are created within the boundaries of an economy during a specific period of time (year, quarter, …) The value created represents the “wealth” of the economy. Why “finished” products and services? ……………………………………………………………………………………………………………………………… GDP AS MEASURE OF WEALTH The concept of GDP

2.2 Gross National Product (GNP)
Copyright Mark Van Couwenberghe, 2017 2.2 Gross National Product (GNP) An “open economy” interacts with foreign countries. Part of the income of the country is created across the borders of the economy. Example: Belgian employee living in Kortrijk and working in a branch office of a French bank in Lille. He/she receives an income from the French bank. Part of the income of foreign countries is created within the borders of the economy. Example: Dutch worker living in Hulst (NL) and working as a driver for a transport company in Sint-Niklaas. He/she receives an income from the Belgian company. GDP AS MEASURE OF WEALTH The concept of GDP

Gross National Product (GNP) is the aggregate and monetary value of all finished products and services that are created by all residents of an economy during a specific period of time (year, quarter, …) The concept of GNP not only relates to the production factor “labour”, but also to all other production factors. GDP AS MEASURE OF WEALTH The concept of GDP

factor income received from foreign countries -
Copyright Mark Van Couwenberghe, 2017 GNP formula: GNP = GDP + factor income received from foreign countries - factor income paid to foreign countries GDP AS MEASURE OF WEALTH The concept of GDP

……………………………………………………………………………………
Copyright Mark Van Couwenberghe, 2017 MC questions: 1) A Chinese construction company, using Chinese workers, builds a new highway in Senegal. This economic activity is part of the: a. GDP of China b. GNP of Senegal c. GDP of Senegal d. none of the above Your answer: ……… Explanation: …………………………………………………………………………………… GDP AS MEASURE OF WEALTH The concept of GDP

……………………………………………………………………………………
Copyright Mark Van Couwenberghe, 2017 MC questions: 2) A Swiss bank owns shares of an American company and receives a dividend at the end of the year. This economic activity is part of the: a. GNP of Switzerland b. GNP of the USA c. GDP of Switzerland d. none of the above Your answer: ……… Explanation: …………………………………………………………………………………… GDP AS MEASURE OF WEALTH The concept of GDP

2.3 Statistics In Belgium, GDP figures are reported by the Institute for National Accounts (“Instituut voor de Nationale Rekeningen”) according to the methodology of ESR 95 (“Europees Stelsel van Rekeningen”). In this way, economic statistics can also be used on a European level. For whom and why can GDP statistics be important? For whom? Why? GDP AS MEASURE OF WEALTH The concept of GDP

3. GDP calculation approaches
Copyright Mark Van Couwenberghe, 2017 Imagine a simple economy. “Micronomia” is an economy that has 3 types of suppliers: farms (tomatoes), factories (tomato sauce) and restaurants (pizza). The farmers grow tomatoes and sell these to the factories. Total turnover = € The tomato plant seeds are imported from neighbour country “Macronomia”: purchase value = € The farmes employ 50 people. Each of them earns a wage of € per year. The factories manufacture tomato sauce. 70% of total turnover (€ ) is exported to “Macronomia”. The other 30% is sold to the restaurants. 200 people work in the factories; they each earn € per year. The pizza restaurants import pizza ingredients from “Macronomia” (€ ) and sell their products to the inhabitants of “Micronomia”. GDP AS MEASURE OF WEALTH GDP calculation approaches

3.1 Production approach (or: output approach)
Copyright Mark Van Couwenberghe, 2017 Total turnover = € The 100 cooks, waiters and other restaurant staff members each earn € per year. Let us calculate the total value of this economy (calculating the GDP): 3.1 Production approach (or: output approach) If we approach GDP from a “production” perspective, we can distinguish 3 types of production and calculate the value that is created: Total GDP = aggregate production value (added-value) = € Activity Growing tomatoes Producing tomato sauce Baking pizza Purchases Turnover Added-value GDP AS MEASURE OF WEALTH GDP calculation approaches

3.2 Income approach The production factors (in this example: labour and entrepreneurship) receive an income. Labour >>> wage Entrepreneurship >>> profit (1) – – (turnover – purchases – wages) (2) – – (3) – – Activity Growing tomatoes Producing tomato sauce Baking pizza Wages Profit (1) (2) (3) Income Total GDP = aggregate income = € GDP AS MEASURE OF WEALTH GDP calculation approaches

3.3 Expenditure approach The different “actors” in the economy spend the income in different ways: consumption, export, import. Activity Consumption Export Import Total GDP = aggregate consumption + aggregate export – aggregate import Total GDP = C + X – M = € As could be expected, the GDP calculation generates the same result in all three approaches. GDP AS MEASURE OF WEALTH GDP calculation approaches

4. Nominal and real GDP 4.1 Nominal GDP
Copyright Mark Van Couwenberghe, 2017 4.1 Nominal GDP GDP is the value of an economy’s wealth. This means we always take into account the price level of the products and services. This price level however fluctuates over time (inflation/deflation). Let us take a simple example: Year 1 Year 2 Volume products & services Average price € 1,00 € 1,50 GDP AS MEASURE OF WEALTH Nominal and real GDP

4.2 Real GDP The GDP “in nominal terms” = volume x average price
Copyright Mark Van Couwenberghe, 2017 The GDP “in nominal terms” = volume x average price Year 1: € Year 2: € We can conclude that the economy “grew” in value by 80% from year 1 to year 2. But is this really the case? 4.2 Real GDP The example above shows that part of the economic growth is actually due to inflation (50%). Price growth is not real growth of the wealth. In order to have a more “correct” view of economic growth, we calculate real GDP by setting prices at the level of a reference year. GDP AS MEASURE OF WEALTH Nominal and real GDP

The GDP “in real terms” = volume x average price of reference year (for example year 1) Year 1: € Year 2: € This leads to the conclusion that the economy has grown by 20% from year 1 to year 2. This reflects the real increase in wealth. We will therefore always use real GDP figures to analyze economies and economic growth. 4.3 GDP deflator The GDP deflator is a way to track the inflation evolution in an economy. GDP AS MEASURE OF WEALTH Nominal and real GDP

GDP deflator = ____________ real GDP Year 1 Year 2
Copyright Mark Van Couwenberghe, 2017 nominal GDP GDP deflator = ____________ real GDP Year 1 Year 2 Nominal GDP € € Real GDP € The GDP deflator equals 1 in year 1 (basis year) and equals 1,5 in year 2. This means that average price level has increased by 50% in 1 year. The inflation is 50%. GDP AS MEASURE OF WEALTH Nominal and real GDP

Fill-in the table below.
Copyright Mark Van Couwenberghe, 2017 Fill-in the table below. € Nominal GDP Real GDP GDP deflator 1 € 0,94 2 € 0,95 3 € 0,98 4 € 5 € € What is the reference year? …………… Why? ………………… How much is inflation in year 5? ………………………………………… Calculate the economy’s economic growth from year 2 to year 3. …………………………………………………… GDP AS MEASURE OF WEALTH Nominal and real GDP

5. Shortcomings of GDP as measure of wealth
Copyright Mark Van Couwenberghe, 2017 5. Shortcomings of GDP as measure of wealth 5.1 Shortcomings The “value” of an economy is measured through its “Gross Domestic Product”. Basically, we are dealing with the concept of “wealth”. The point is, a country may have a high GDP but may be heavily polluted or have a low life expectancy… GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

These relate to “well-being” and go beyond pure wealth. This is
Copyright Mark Van Couwenberghe, 2017 These relate to “well-being” and go beyond pure wealth. This is one shortcoming of the GDP measure. But which other activities / factors are also not reflected in a country’s GDP? ………………………………………… ………………………………………… ………………………………………… GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

GDP figures do not measure a country’s well-being, nor any other
Copyright Mark Van Couwenberghe, 2017 ………………………………………… ………………………………………… GDP figures do not measure a country’s well-being, nor any other non-monetary activity, although all these elements have an impact on the standard of living. GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

5.2 Alternative measures 1) Human Development Index (HDI)
Copyright Mark Van Couwenberghe, 2017 5.2 Alternative measures 1) Human Development Index (HDI) The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The Human Development Index (HDI) is a summary measure of average achievement in 3 key dimensions of human development: - a long and healthy life being knowledgeable and have a decent standard of living. The health dimension is assessed by life expectancy at birth, the education dimension is measured by mean of years of schooling for adults aged 25 years and more and expected years of schooling for children of school entering age. The standard of living dimension is measured by gross national product per capita. GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth
Copyright Mark Van Couwenberghe, 2017 GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

2) Happy Planet Index (HPI)
Copyright Mark Van Couwenberghe, 2017 2) Happy Planet Index (HPI) The Happy Planet Index (HPI) is an index of human well-being and environmental impact that was introduced by the New Economics Foundation (NEF) in July 2006. The index is weighted to give progressively higher scores to nations with lower ecological footprints. The index is designed to challenge well-established indices of countries’ development, such as the gross domestic product (GDP) and the Human Development Index (HDI), which are seen as not taking sustainability into account. In particular, GDP is seen as inappropriate, as the usual ultimate aim of most people is not to be rich, but to be happy and healthy. Furthermore, it is believed that the notion of sustainable development requires a measure of the environmental costs of pursuing those goals. GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

3) Gross National Happiness (GNH)
Copyright Mark Van Couwenberghe, 2017 3) Gross National Happiness (GNH) Gross National Happiness (GNH) is a developing philosophy as well as an "index" which is used to measure the collective happiness in any specific nation. The concept was first mentioned in the Constitution of Bhutan, which was enacted on 18 July, 2008. The GNH's measures are: sustainable and equitable socio-economic development environmental conservation preservation and promotion of culture and good governance GNH is distinguishable by for example valuing collective happiness as the goal of governance, and by emphasizing harmony with nature and traditional values. Remark: consult the “World Map of Happiness” to see country ranking GDP AS MEASURE OF WEALTH Shortcomings of GDP as measure of wealth

6. Using GDP to compare wealth of countries
Copyright Mark Van Couwenberghe, 2017 6.1 GDP per capita Using GDP to compare wealth of countries may lead to the wrong conclusions. Example: GDP Belgium (2015, $ billons) 454,7 GDP China (2015, $ billions) ,9 One may conclude that the Chinese wealth is almost 25 times our wealth. In reality, China is still considered a “developing country”. China’s GDP is much higher because of its size in population! GDP AS MEASURE OF WEALTH Using GDP to compare wealth of countries

GDP per capita Belgium (2015, $) 40.231
Copyright Mark Van Couwenberghe, 2017 The GDP per capita measure is more accurate to reflect the “average wealth” in an economy. Example: GDP per capita Belgium (2015, $) GDP per capita China (2015, $) We can conclude that the average Belgian wealth is about 5 times the Chinese wealth. Therefore: use GDP per capita figures to compare wealth between countries. total GDP GDP per capita = ______________________ population GDP AS MEASURE OF WEALTH Using GDP to compare wealth of countries

7. Assignment Copyright Mark Van Couwenberghe, 2017 Use the concepts of GDP, GNP, real GDP, nominal GDP, GDP deflator, GDP per capita and the alternative measures to compare the wealth between the US and Russia. Use the data of the IMF (World Economic Outlook database). Fill-in the table below and explain the differences in wealth and well-being between both countries. US Russia Real GDP 2016 Nominal GDP 2016 GDP deflator 2016 GDP AS MEASURE OF WEALTH Assignment

Explanation of differences: ………………………………………………………………………………………………………
Copyright Mark Van Couwenberghe, 2017 US Russia GNP 2016 GDP per capita 2016 HDI 2016 HPI 2016 GNH 216 Explanation of differences: ……………………………………………………………………………………………………… GDP AS MEASURE OF WEALTH Assignment

………………………………………………………………………………………………………
Copyright Mark Van Couwenberghe, 2017 ……………………………………………………………………………………………………… GDP AS MEASURE OF WEALTH Assignment

8. Exercises Copyright Mark Van Couwenberghe, 2017 Exercise 1: nowadays, wealth is measured in a monetary way. But perceptions of what constitutes wealth change over time. What other measures of wealth were/are used in more ancient and/or more primitive economies? Measure of wealth Economy GDP AS MEASURE OF WEALTH Exercises

………………………………………………………………………………….
Copyright Mark Van Couwenberghe, 2017 Exercise 2: visit the website of the Institute of National Accounts and analyze the Belgian GDP data of 2016. What is the real GDP in 2016? …………………………………………………………………………………. 2) What is the Belgian GDP distribution per activity sector? + what are your conclusions? …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Exercises

+ what are your conclusions when comparing to GDP?
Copyright Mark Van Couwenberghe, 2017 3) What is the GNP in 2016? + what are your conclusions when comparing to GDP? …………………………………………………………………………………. 4) What is the Belgian GDP distribution according to income? + what are your conclusions? …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Exercises

Role in GDP calculation
Copyright Mark Van Couwenberghe, 2017 5) What is the role of the following elements in the calculation of GDP? Element Role in GDP calculation Depreciations Taxes Subsidies GDP AS MEASURE OF WEALTH Exercises

6) What is the Belgian GDP distribution according to expenditures?
Copyright Mark Van Couwenberghe, 2017 6) What is the Belgian GDP distribution according to expenditures? + what are your conclusions? …………………………………………………………………………………. Exercise 3: consider the following simple economy. There are 3 types of economic activity: farmers producing corn, millers producing flour and bakers producing bread. The farmers buy raw € They sell the corn to the € GDP AS MEASURE OF WEALTH Exercises

The millers produce flour and sell it to the bakers @ € 150.000.000
Copyright Mark Van Couwenberghe, 2017 The millers produce flour and sell it to the € The flour is used to produce bread. The bread is sold to the € Calculate this economy’s GDP using the production or output approach. …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Exercises

Exercise 4: consider the following simple economy.
Copyright Mark Van Couwenberghe, 2017 Exercise 4: consider the following simple economy. Only 3 engtrepreneurs generate the country’s wealth: baker Sarah, butcher Fabrizio and farmer Mauro. Sarah’s turnover is € during 1 year. She buys corn from the farmer at a cost of € per year. Sarah has two workers: their individual wage is € per year. Fabrizio has a turnober of € per year, a part of this turnover is exported: € He buys meat from the farmer. Cost = € per year. Fabrizio has 2 workers: their individual wage is € per year. Mauro does not only sell corn and meat. He also sells vegetables to consumers (households). Turnover = € per year Mauro has 1 worker, he earns € per year. He buys seeds and animals in another € Calculate this economy’s GDP using the 3 approaches. GDP AS MEASURE OF WEALTH Exercises

GDP = ……………………………………………………………
Copyright Mark Van Couwenberghe, 2017 ………………………… approach GDP = …………………………………………………………… GDP AS MEASURE OF WEALTH Exercises

9. Extra exercises Exercise 1: discuss the following chart.
Copyright Mark Van Couwenberghe, 2017 Exercise 1: discuss the following chart. GDP AS MEASURE OF WEALTH Extra exercises

………………………………………………………………………………….
Copyright Mark Van Couwenberghe, 2017 …………………………………………………………………………………. Exercise 2: read the following text and answer the question. Purchasing Power Parity (PPP) is an economic theory that compares different countries' currencies through a market "basket of goods" approach. According to this concept, two currencies are in equilibrium or at par when a market basket of goods (taking into account the exchange rate) is priced the same in both countries. GDP AS MEASURE OF WEALTH Extra exercises

The highly popular Big Mac Index is used to measure the purchasing power parity (PPP) between nations, using the price of a Big Mac as the benchmark. The Big Mac index suggests that, in theory, changes in exchange rates between currencies should affect the price that consumers pay for a Big Mac in a particular nation, replacing the "basket" with the famous hamburger. For example, if the price of a Big Mac is $4.00 in the U.S. as compared to 2.5 pounds sterling in Britain, we would expect that the exchange rate would be 1.60 (4/2.5 = 1.60). If the exchange rate of dollars to pounds is any greater, the Big Mac Index would state that the pound was overvalued, any lower and it would be under-valued. Important: some accounts of GDP are adjusted for relative purchasing power parity or PPP. This adjustment is based on an attempt to convert nominal GDP into a number more easily comparable between countries with different currencies. GDP AS MEASURE OF WEALTH Extra exercises

Question: fill-in the missing text.
Copyright Mark Van Couwenberghe, 2017 Question: fill-in the missing text. Suppose it costs $10 to buy a shirt in the U.S. and it costs €8.00 to buy the same shirt in Germany. To make an apples-to-apples comparison, the €8.00 in Germany needs to be converted into U.S. dollars. If the exchange rate was such that the shirt in Germany costs $15.00, the PPP would be …………… What does this mean? For every $1.00 spent on goods/services in the U.S., it takes …………… to obtain the same goods/services in Germany. Question: which 5 nations have the highest GDP in PPP? (consult IMF) ………………………………………………………………………………… GDP AS MEASURE OF WEALTH Extra exercises

Exercise 3: discuss the following chart.
Copyright Mark Van Couwenberghe, 2017 Exercise 3: discuss the following chart. GDP AS MEASURE OF WEALTH Extra exercises

………………………………………………………………………………….
Copyright Mark Van Couwenberghe, 2017 …………………………………………………………………………………. Exercise 4: write-down your personal opinion on the level of wealth and well-being in Belgium. Which elements in your personal life reflect the level of wealth and wel-being in this country? GDP AS MEASURE OF WEALTH Extra exercises

………………………………………………………………………………….
Copyright Mark Van Couwenberghe, 2017 …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Extra exercises

10. “The world’s 10 biggest economies in 2017”
Copyright Mark Van Couwenberghe, 2017 10. “The world’s 10 biggest economies in 2017” The economy of the United States is the largest in the world. At $18 trillion, it represents a quarter share of the global economy (24.3%), according to the latest World Bank figures. China follows, with $11 trillion, or 14.8% of the world economy. Japan is in third place with an economy of $4.4 trillion, which represents almost 6% of the world economy. European countries take the next three places on the list: Germany in fourth position, with a $3.3 trillion economy; the United Kingdom in fifth with $2.9 trillion; and France in sixth with $2.4 trillion. India is in seventh place with $2 trillion, and Italy in eighth with an economy of over $1.8 trillion. Ninth place goes to Brazil, with an almost $1.8 trillion economy. And in 10th is Canada, with an economy of over $1.5 trillion. The economy of the United States is larger than the combined economies of numbers three to 10 on the list. GDP AS MEASURE OF WEALTH Texts

GDP AS MEASURE OF WEALTH Texts
Copyright Mark Van Couwenberghe, 2017 GDP AS MEASURE OF WEALTH Texts

Europe comes third with just over one-fifth of global GDP (21.37%).
Copyright Mark Van Couwenberghe, 2017 Looking at the chart, the Asian bloc clearly has a larger share than anywhere else, representing just over a third (33.84%) of global GDP. That’s compared to North America, which represents just over a quarter, at 27.95%. Europe comes third with just over one-fifth of global GDP (21.37%). Together, these three blocs generate more than four-fifths (83.16%) of the world’s total output. GDP AS MEASURE OF WEALTH Texts

Fastest-growing economy
Copyright Mark Van Couwenberghe, 2017 Fastest-growing economy The US may not dominate for much longer, however. Although China trails the US by $7 trillion, it’s catching up. China’s economy grew by 6.7% in 2016, compared with America’s 1.6%, according to the IMF. China has also overtaken India as the fastest-growing large economy. The IMF’s World Economic Outlook estimated China’s economy grew at 6.7% in 2016, compared with India’s 6.6%. Brazil’s economy has contracted in the last year by 3.5%, the only one in the top 10 to do so. GDP AS MEASURE OF WEALTH Texts

The biggest economies in 2050
Copyright Mark Van Couwenberghe, 2017 The biggest economies in 2050 A new study says that China will be in first place by 2050, because emerging economies will continue to grow faster than advanced ones. India will rank second, the US will be third, and fourth place is expected to go to Indonesia. The UK could be down to 10th place by 2050, while France could be out of the top 10 and Italy out of the top 20 as they are overtaken by faster-growing emerging economies such as Mexico, Turkey and Vietnam. The report also says that the world economy could more than double in size by 2050, far outstripping population growth, due to technology-driven productivity. GDP AS MEASURE OF WEALTH Texts

“These are the 30 wealthiest countries in the world.”
Copyright Mark Van Couwenberghe, 2017 “These are the 30 wealthiest countries in the world.” Some of the smallest countries in the world continue to dominate the list of the world's richest countries. The ranking was published in February 2017 and based on data from the International Monetary Fund. The magazine ranked the world's countries according to their gross domestic product (GDP) based on purchasing power parity (PPP) per capita. The PPP takes into account the relative cost of living and the inflation rates of the countries to compare living standards among the different nations. The small countries that dominate the top ten all have small populations compared to countries that lead the world purely in terms of GDP — such as the United States, China, or Germany. Most of these small nations heavily depend on immigrant workers who often do not reside in the country they are working in or are not granted resident status, and are therefore not counted in the GDP per capita calculations. GDP AS MEASURE OF WEALTH Texts

30. Japan — GDP per capita: $38,893 (£31,732)
Copyright Mark Van Couwenberghe, 2017 15 of the 30 richest countries in the world are in Europe, while big some big economies such as the US, Japan, and Canada also made the cut. The GDP per capita listed represents the amount of wealth produced in 2016 and is expressed in US dollars. 30. Japan — GDP per capita: $38,893 (£31,732) 29. Finland — GDP per capita: $41,812 (£34,114) 28. France — GDP per capita: $42,384 (£34,581) 27. United Kingdom — GDP per capita: $42,513 (£34,686) 26. Oman — GDP per capita: $43,737 (£35,685) 25. Belgium — GDP per capita: $44,881 (£36,618) 24. Canada — GDP per capita: $46,239 (£37,726) 23. Denmark — GDP per capita: $46,602 (£38,022) 22. Taiwan — GDP per capita: $47,790 (£38,991) 21. Austria — GDP per capita: $47,856 (£39,045) 20. Iceland — GDP per capita: $48,070 (£39,220) GDP AS MEASURE OF WEALTH Texts

19. Germany — GDP per capita: $48,189 (£39,317)
Copyright Mark Van Couwenberghe, 2017 19. Germany — GDP per capita: $48,189 (£39,317) 18. Australia — GDP per capita: $48,806 (£39,820) 17. Sweden — GDP per capita: $49,678 (£40,532) 16. Bahrain — GDP per capita: $50,302 (£41,041) 15. The Netherlands — GDP per capita: $50,846 (£41,485) 14. Saudi Arabia — GDP per capita: $54,078 (£44,122) 13. United States — GDP per capita: $57,293 (£46,745) 12. Hong Kong — GDP per capita: $58,094 (£47,375) 11. Switzerland — GDP per capita: $59,375 (£48,420) 10. San Marino — GDP per capita: $64,443 (£52,553) 9. United Arab Emirates — GDP per capita: $67,696 (£55,206) 8. Norway — GDP per capita: $69,296 (£56,510) 7. Ireland — GDP per capita: $69,374 (£56,574) 6. Kuwait — GDP per capita: $71,263 (£58,114) 5. Brunei — GDP per capita: $79,710 (£65,003) 4. Singapore — GDP per capita: $87,082 (£71,015) 3. Macao — GDP per capita: $96,147 (£78,407) 2. Luxembourg — GDP per capita: $101,936 (£83,128) 1. Qatar — GDP per capita: $129,726 (£105,791) GDP AS MEASURE OF WEALTH Texts

………………………………………………………………………………….
Copyright Mark Van Couwenberghe, 2017 Question 1: which elements explain that the US is still the largest economy in the world? …………………………………………………………………………………. Question 2: which elements explain that the Chinese economy is the fastest-growing economy? …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Texts

………………………………………………………………………………….
Copyright Mark Van Couwenberghe, 2017 …………………………………………………………………………………. Question 3: which elements explain that 15 of the 30 richest countries in the world are in Europe? …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Texts

Question 4: which elements explain that a tiny country such as
Copyright Mark Van Couwenberghe, 2017 Question 4: which elements explain that a tiny country such as Luxembourg is so wealthy? …………………………………………………………………………………. GDP AS MEASURE OF WEALTH Texts

LAST BUT NOT LEAST: CLIL WRITING PRACTICE
Copyright Mark Van Couwenberghe, 2017 LAST BUT NOT LEAST: CLIL WRITING PRACTICE Create sentences using the indicated words: 1) wealth, GDP, goods & services, economy, value ……………………………………………………………………………………………… ………………………………………………………………………………………………. GDP AS MEASURE OF WEALTH

2) inflation, real GDP, over time, nominal GDP, correct
Copyright Mark Van Couwenberghe, 2017 2) inflation, real GDP, over time, nominal GDP, correct ……………………………………………………………………………………………… ………………………………………………………………………………………………. GDP AS MEASURE OF WEALTH Introduction

3) well-being, shortcoming, GNH, alternative, GDP
Copyright Mark Van Couwenberghe, 2017 3) well-being, shortcoming, GNH, alternative, GDP ……………………………………………………………………………………………… ………………………………………………………………………………………………. GDP AS MEASURE OF WEALTH

Vocabulary GDP AS MEASURE OF WEALTH
Copyright Mark Van Couwenberghe, 2017 Vocabulary GDP AS MEASURE OF WEALTH

GDP AS MEASURE OF WEALTH
Copyright Mark Van Couwenberghe, 2017 GDP AS MEASURE OF WEALTH

Master in Applied Economics, University of Antwerp

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