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RE: [hackers-il] Is Gross Domestic Product Meaningful?

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  • Ofir Carny
    A few points: GDP and GNP are not the same thing, they differ on the definition of the economy or of country. A different, yet equivalent definition cites the
    Message 1 of 3 , Feb 27, 2003
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      A few points:

      GDP and GNP are not the same thing, they differ on the definition of the economy or of country.

      A different, yet equivalent definition cites the 'sum of added values', it is easier to understand.

      Your example is actually close to the reality, think about lawyers, or babysitters. Many people consider this
      a problem with the definition. For more absurd examples look at people eating at a restaurant
      versus preparing their own food. It also do not take into account consumed resources and have problems with crime.

      The example falls however, because the definition implicitly assumes open market prices (but it have many problems there too).

      I only touched this subject on the surface, for lack of time. If anyone is interested, remind me next week, and I'll elaborate.

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      -----Original Message-----
      From: Shlomi Fish [mailto:shlomif@...]
      Sent: Thursday, February 27, 2003 2:35 PM
      To: Hackers-IL
      Subject: [hackers-il] Is Gross Domestic Product Meaningful?



      Are discussions of Econmics theory on-topic here? If not, please quietly
      move this discussion to Philosophy-IL.

      We often here mentioning of Gross Domestic Product (GDP) or Gross National
      Prodcut (GNP) in the news. I always assumed it meant exactly that: the
      amount of goods that were manufactured in a country within a year.
      However, the exact ways to calculate it is a bit different:

      http://www.pitt.edu/~jduffy/econ110/lec4/tsld001.htm

      Based on this, my father told me that if he and I start a country and he
      sells me something meaningless for $100, then our country will have a GDP
      of $100.

      I got to this even crazier attack: let's suppose he sells me a piece of
      paper for $1,000,000 dollars and I sell him a different piece of paper for
      $1,000,000. That way, we will have a GDP of 2 million dollars. And I can
      increase the GDP ad-infinitum this way.

      Can anyone clarify this thing a bit?

      Regards,

      Shlomi Fish





      ----------------------------------------------------------------------
      Shlomi Fish shlomif@...
      Home Page: http://t2.technion.ac.il/~shlomif/

      My opinions may seem crazy, but they all make sense. Insane sense, but
      sense nonetheless.



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