@economics-that-works
-
@dlakelan
@FantasticalEconomics5 min
Although focused on the non monetary elements of well being, Murphy scratches on some of the absurdities included in GDP. I wonder if the U.S. does similar. -
Hamish Buchananreplied to GhostOnTheHalfShell last edited by
GDP measures the churn of money through the economy not the long-term value of what it buys. Money spent on things that destroy lives and property or quickly go to the garbage is counted as equal to that spent on things that nurture people or last for generations.
GDP growth depends on perpetuating poverty because the poor spend while the rich hoard.
@GhostOnTheHalfShell @economics-that-works @dlakelan @FantasticalEconomics
-
Shannon Clarkreplied to Hamish Buchanan last edited by
@hamishb @GhostOnTheHalfShell @economics-that-works @dlakelan @FantasticalEconomics gdp goes up the faster expensive but necessary items have to be replaced appliances, cars, clothing - full replacements grow gdp more than repairs would. Even more financed goods likely get counted multiple times as the transactions flow across the economy and get recognized as income by lenders as well as by the retailer and manufacturer. So a focus on gdp indirectly leads to planned obsolescence and fads
-
Daniel Lakelandreplied to Shannon Clark last edited by
@Rycaut
This is SORT of true. If I understand correctly there's a depreciation estimate that is subtracted from GDP. But this estimate is very crude. So if washing machine mfg all make their machines last 5 years instead of 20, there will be a long lag (maybe even a lifetime) before this estimate of depreciation catches up to reality. In theory, GDP doesn't go up, but not in practice.
@hamishb @GhostOnTheHalfShell @economics-that-works @FantasticalEconomics -
Shannon Clarkreplied to Daniel Lakeland last edited by
@dlakelan @hamishb @GhostOnTheHalfShell @economics-that-works @FantasticalEconomics it is a very flawed measure. See https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/gross-domestic-product-GDP (explainer from the IMF) they say that depreciation isn’t included but if it is it is the “net domestic product” (a measure I have never seen cited)
Here in the US the official GDB doesn’t appear to factor in depreciation. See https://www.bea.gov/resources/learning-center/what-to-know-gdp
There are lots of flaws to point to in GDB in theory and practice