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Of course economic growth can last. GDP is just a number, in nominal currency, that measures not just sheer output, but also efficiency, technological progress

by Mikeb85 11y ago

Of course economic growth can last. GDP is just a number, in nominal currency, that measures not just sheer output, but also efficiency, technological progress, etc... In an idyllic future, when we're no longer extracting oil from the ground, no longer working manual labour jobs, etc..., economic output may reflect technology and ideas being created, the dollar will be worth much less (thus more nominal output), and as long as people are engaged in some form of economic activity (buying something, working in any form), we'll have measurable growth.

slackson 11y ago
Nominal GDP growth and real GDP growth are very different things, and it's the latter people are referring to. If it was only nominal that mattered, we could have a arbitrary economic growth through inflation.
- Mikeb85 11y ago
  Even 'real' GDP numbers are boosted by inflation (ie. the price levels of everything rising over time, not just the devaluation of currency). Real GDP is still just a number to compare output between two points in time, still measured in nominal currency (albeit inflation adjusted for say, a 15 year difference). The calculation of 'Real' GDP still is limited, only useful for comparison purposes. Several generations ago, some of my ancestors (my great grandparents) came here and bought their farmland for $10. Now I can barely buy a beer for 10 dollars. Yet we don't measure GDP in 1900 dollars, or in year 3000BC shekels. Regardless, in many ways, my beer today IS worth more than a farm in 1900. My beer was made because of generations of farmers growing grain, building up their homesteads, brewers buying equipment and employed generations of employees, farming equipment improving efficiency, and everything else that goes into the supply chain. Simply put, the value of technological progress is built into current price levels.
crimsonalucard 11y ago
I can assure you Mike, Once we stop extracting oil from the ground, EVERYONE will be returning to life a manual labor. The only reason why you aren't doing manual labor on your job right now is because of oil.
- Mikeb85 11y ago
  Because oil is the only source of energy we have, right? Things like nuclear energy, geo-thermal, hydro, wind and solar don't exist. And there's no chance of creating a technology that allows us to produce even more power, say, nuclear fusion... Regardless, I did mention an 'idyllic' future. Obviously we'll be burning fossil fuel for the immediate future.

by Mikeb85 11y ago

slackson 11y ago

Nominal GDP growth and real GDP growth are very different things, and it's the latter people are referring to. If it was only nominal that mattered, we could have a arbitrary economic growth through inflation.

Mikeb85 11y ago
Even 'real' GDP numbers are boosted by inflation (ie. the price levels of everything rising over time, not just the devaluation of currency). Real GDP is still just a number to compare output between two points in time, still measured in nominal currency (albeit inflation adjusted for say, a 15 year difference). The calculation of 'Real' GDP still is limited, only useful for comparison purposes. Several generations ago, some of my ancestors (my great grandparents) came here and bought their farmland for $10. Now I can barely buy a beer for 10 dollars. Yet we don't measure GDP in 1900 dollars, or in year 3000BC shekels. Regardless, in many ways, my beer today IS worth more than a farm in 1900. My beer was made because of generations of farmers growing grain, building up their homesteads, brewers buying equipment and employed generations of employees, farming equipment improving efficiency, and everything else that goes into the supply chain. Simply put, the value of technological progress is built into current price levels.

crimsonalucard 11y ago

I can assure you Mike, Once we stop extracting oil from the ground, EVERYONE will be returning to life a manual labor. The only reason why you aren't doing manual labor on your job right now is because of oil.

Mikeb85 11y ago
Because oil is the only source of energy we have, right? Things like nuclear energy, geo-thermal, hydro, wind and solar don't exist. And there's no chance of creating a technology that allows us to produce even more power, say, nuclear fusion... Regardless, I did mention an 'idyllic' future. Obviously we'll be burning fossil fuel for the immediate future.