how useful is the GDP as a measure of the standard of living in a country ?
Real GDP per capita is a better measure. That is GDP adjusted for price changes and divided by the population. There are still problems with this measure, however, as it does not tell you anything about the distribution of income. The GINI index can be used for this. Also GDP does not take into account such things as the underground economy, illicit activity, leisure, pollution, hours worked, congestion etc. Having said this, real GDP per capita is the best measure we have.
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