tag:blogger.com,1999:blog-2121490237517462736.post1628363630959167582..comments2024-02-20T01:52:53.299-08:00Comments on Futronomics: contrarian analysis of global macro trends, commodities, currencies, equities: On The Calculation Of GDPMatt Stileshttp://www.blogger.com/profile/17977694389453612864noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2121490237517462736.post-31656466995990555962009-08-24T15:03:19.972-07:002009-08-24T15:03:19.972-07:00Matt,
Usually your critical analysis is excellent...Matt,<br /><br />Usually your critical analysis is excellent, but this post is not, IMHO.<br /><br />1. Do you have an alternative measurement for GDP? The current measurement may be flawed, but what if its still the best available metric for economic activity?<br /><br />2. Bobby Kennedy's argument is also flawed. Yes - if your house burns down, your costs for replacing it are significant. <i>However</i>, spending <i>more</i> money on a new house means you have to spend <i>less</i> money elsewhere, either now, or in the future.<br /><br />In a nutshell, whether you spend money on 'negative' or 'positive' things, GDP is still an accurate projection of the economic activity in an economy during a certain period of time.<br /><br />Yes, foolhardy decisions may certainly boost short term GDP at the expense of long term GDP - but the GDP numbers themselves are nevertheless an accurate description of economic activity.<br /><br />Your argument seems to be that aggregate numbers miss some information. Of course they do - thats why they're an aggregate. And just like any back-of-the-envelope analysis, it makes significant assumptions, but is useful for many overview-type analyses.<br /><br />It would be a mistake to look at GDP numbers and decide thats all the information you need about an economy - but it would also be a mistake to decide that it doesn't contain any information either.RRBhttps://www.blogger.com/profile/09022375119606981298noreply@blogger.com