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This glossary is going to be fun

Gross Domestic Product (GDP) is a measure of the economic output of a country. It is the total value of all goods and services produced in a country in a period, irrespective of who produced them.

No, it isn’t.

Gross domestic product is a monetary measure of the market value of all the final goods and services produced and sold in a specific time period by countries.

“Final” is a vitally important point. It does not – not – include intermediate goods. And market prices is also an important point.

In addition, GDP also records the value of transactions even though they might add nothing to the net sum of human well-being. For example, the GDP of Alaska rose considerably after a major environmental accident on its shores that resulted in significant oil pollution but this did not improve the well-being of people in that state.

No. GDP rose in Alaska because of significant spending on cleaning up that pollution. And we do think that cleaning up pollution is an improvement in well-being. That’s why we do it. There was a loss from the pollution, certainly – a loss on the stock or balance sheet side, not one that crosses the flow or P&L. But the cleaning up the pollution did make people richer which is why it’s in GP.

13 thoughts on “This glossary is going to be fun”

  1. GDP also records the value of transactions even though they might add nothing to the net sum of human well-being.

  2. A glossary of terms defined in his own way. So, presumably, then he’ll start insisting that when the world uses those terms in future they should be interpreted according to his definition and understanding…all others being outdated neomumbojumbo stuff.

    Didn’t Orwell articulate this tactic with his detailed history of NewSpeak?


  3. ‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

    ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’

    ‘The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.’

    (I almost quoted about two pages, but decided against it. The more you read of that passage, the less Humpty resembles an egg, and the more he seems to turn into a potato. Take a look.)

  4. I’m off to break some windows.

    Thanks for increasing GDP with the stones of fallacy, philip.
    And they said it couldn’t be done.

  5. Bloke in North Dorset

    “ I’m off to break some windows.”

    Don’t forget to say you’re doing it to appease the global warming gods.

  6. Did Sir Tim just admit crapitalism destroys welfare?

    Then does crapitalism claim it improved the welfare it just destroyed?

    What are the error bars on GDP? Conservatively, are they plus-or-minus 100%?

  7. More than 100%. As you would know if you’d ever bothered to find out. How well off people are is GDP plus the consumer surplus. The consumer surplus is usually estimated at at least – at least – 100% of GDP.

    Critiques of everything are, of course, welcome. But could I ask – no, beg – that you gain the first fucking clue before you criticise?

  8. Here’s a thought. How do you monetise 14 hours waiting in A&E? Since significant numbers give up/recover/die in the process, we may be talking net negatives here.

  9. I like the honesty in the assessment of a QALY, that it can actually be a -ve. In other words say that 14 day wait in A&E was so bad it was worse than being alive, so even if the rest of your year is neutral then it’s around -0.04 QALY you had that year.

  10. Did Tim the Infallible forget the - part of +/-?

    《Rich world people in 2000 were 8 times better off than rich world people in 1900.》

    Were the ones that increased the suicide rate 8 times worse off?

    Why do I feel worse off every year? Why do the 1970s tv shows seem like a better life where ppl were more free to sleep outside?

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