Tyler Cowen cites an Economist piece on GDP vs. GDP per Capita:
Using growth in GDP per head rather than crude GDP growth reveals a strikingly different picture of other countries’ economic health. For example, Australian politicians often boast that their economy has had one of the fastest growth rates among the major developed nations — an average of 3.3% over the past five years. But Australia has also had one of the biggest increases in population; its GDP per head has grown no faster than Japan’s over this period. Likewise, Spain has been one of the euro area’s star performers in terms of GDP growth, but over the past three years output per person has grown more slowly than in Germany, which like Japan, has a shrinking population.Some emerging economies also look less impressive when growth is compared on a per-person basis. One of the supposedly booming BRIC countries, Brazil, has seen its GDP per head increase by only 2.3% per year since 2003, barely any faster than Japan’s. Russia, by contrast, enjoyed annual average growth in GDP per head of 7.4% because the population is falling faster than in any other large country (by 0.5% a year). Indians love to boast that their economy’s growth rate has almost caught up with China’s, but its population is also expanding much faster. Over the past five years, the 10.2% average increase in China’s income per head dwarfed India’s 6.8% gain.
GDP per capita seems like a clearly better metric, but commenter Sebastian Holsclaw notes an important twist to keep in mind:
If your GDP per capita is being dragged down a bit by immigration that might not be bad for any of the parties involved. The immigrant ends up with a better income than he would have gotten staying in his old country while the new country gets the benefit of his labor and taxes.
Immigration changes the capita we’re looking at.