Brian, something I struggle with and maybe you can help.
GDP literally stands for "Gross Domestic Product" and is a measure of a nation's production as a means of assessing economic health. However, GDPs largest input metric is consumption (currently 68%) not production.
This means consumption of imported goods paid for via credit is counted as GDP, right? Doesn't this make GDP as a measure of the health of an economy completely fraudulent and props up a leveraged financial economy that increasingly undermines the middle class and wealth equality?
Since everything produced has to go somewhere, you can calculate the size of GDP based on where it goes based on expenditures (consumption, inventory), or via adding up production. Household consumption might be 68% of expenditures, but 0% of production. Alternatively, Gross Domestic Income theoretically equals GDP.
The different ways of calculating it end up slightly different - “statistical discrepancy.” I’m not a great source on the GDP components, but if you look at GDP reports, they will add up the various components. You want to look at nominal GDP when doing that, since real GDP can get confusing.
It’s been a long time since I looked, but the BEA should have a good set of GDP tables somewhere on their website. Statscan has a good (large) primer on the national accounts (e.g., GDP), but the actual data releases might be a mess.
Brian, something I struggle with and maybe you can help.
GDP literally stands for "Gross Domestic Product" and is a measure of a nation's production as a means of assessing economic health. However, GDPs largest input metric is consumption (currently 68%) not production.
This means consumption of imported goods paid for via credit is counted as GDP, right? Doesn't this make GDP as a measure of the health of an economy completely fraudulent and props up a leveraged financial economy that increasingly undermines the middle class and wealth equality?
Since everything produced has to go somewhere, you can calculate the size of GDP based on where it goes based on expenditures (consumption, inventory), or via adding up production. Household consumption might be 68% of expenditures, but 0% of production. Alternatively, Gross Domestic Income theoretically equals GDP.
The different ways of calculating it end up slightly different - “statistical discrepancy.” I’m not a great source on the GDP components, but if you look at GDP reports, they will add up the various components. You want to look at nominal GDP when doing that, since real GDP can get confusing.
It’s been a long time since I looked, but the BEA should have a good set of GDP tables somewhere on their website. Statscan has a good (large) primer on the national accounts (e.g., GDP), but the actual data releases might be a mess.