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I went on to qualify that I'm assuming velocity holds constant. I really think GDP is a terrible measure. We need something that reflects the actual amount of "
by branchless 11y ago
I went on to qualify that I'm assuming velocity holds constant. I really think GDP is a terrible measure. We need something that reflects the actual amount of "good stuff" getting done, not the amount of fiat created by banks to ramp the same pile of bricks.
- dredmorbius 11y agoWhile we're agreed on the deficiencies of GDP, the original issue was how economists define growth -- and, well, that's how, and is what Gordon's book addresses. Mismeasures notwithstanding, to a first approximation, GDP likely works fairly well. Not that it's not the fiat created by banks, but the turnover (revenues) generated in the process which would inflate GDP. Something I've been meaning to look into -- and which will likely upset a maths friend of mine on G+ -- is whether financial sector activity really ought be counted as productive. Much of it I suspect isn't.
- branchless 11y agoThat's my whole point. Loads of money is created for lending against land without a single brick being placed as banks force people to pledge all their future labour in exchange for the temerity to exist.