The last time GDP was this bad was only a few years ago

FROM OUR OBSESSION

Global Economic Disruptions

Globalization, automation, and inequality.

With people staying home and whole industries shut down due to the Covid-19 pandemic there is significantly less commerce than there used to be. Definitionally, this means that the sum of all of that commerce—known as GDP—has declined.

Analysts and journalists focus on how quickly GDP is changing to help peopleunderstand the direction that a country’s economy is headed. But the level of GDP can also be used as a snapshot of a nation’s income. Portioning GDP per each resident, we get an estimate of the current prosperity of the average person.

In the first quarter of 2020, prosperity dropped around the world, sometimes severely. Though even in the worst affected places, prosperity only dropped to levels last seen in recent years.

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