...Thanks to improved policy out of Washington, the Plow Horse has picked up its gait....
...The GDP formula is C + G + I + NX, where
C = Consumer spending
G = Government spending
I = Private investment
NX = Net exports.
G = Government spending
I = Private investment
NX = Net exports.
...To an economist, a barrel of oil selling for $100 has the exact same effect on GDP as two barrels of oil selling at $50. Silly, but that’s the way the accounting works.
...GDP is a historical artifact from an industrial economy that doesn’t really exist anymore...Technically, manufacturing is still 35% of GDP, but fewer than 9% of US workers are actually involved in that manufacturing.
...how much more productive technology has made us...it’s 1975 and you want to know what GDP growth was in 1972...Remember the spiral-bound map books...
... the reduction in labor needed to operate a power plant as we move from nuclear or coal to natural gas or wind or solar...
...coal ...plants all shift to natural gas, which they will over time. That’s a loss of 130,800 workers...
...A key question: Is GDP completely outmoded, or does it just miss some things?
...Diane Coyle...She proposed in a recent paper with Benjamin Mitra-Kahn a series of incremental changes that should help: better measurement of intangible goods, an adjustment based on income distribution, and some other relatively simple changes.
...Distribution effects are a problem whenever we look at GDP per capita, ...indeed it is likely in some places, for per capita GDP to rise sharply while most of the population sees no change in its living standards or economic health. An adjustment to compensate for this inequity is an excellent idea.
...GDP Growth...If GDP is flat or falling, we see a recession and react accordingly. That is particularly the case with political leaders and central bankers, who then introduce policies to solve the perceived problem. These policies can be damaging if the problem is less serious than central bankers think it is. This may be happening in the US right now.
...What we want is a benchmark of economic progress....
...concepts like income inequality may differently skew the witches’ brew that is GDP. The only part of the economy that is really subject to serious increases in productivity is manufacturing; and, as noted above, manufacturing involves less than 9% of the workforce.
...In 2013 the Skoll World Forum launched the Social Progress Index,
...using GDP but add other data points to clarify it. They would use things like life expectancy, debt levels, educational achievement, and other social progress metrics.
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