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GDP might be useful for comparing what happened this year to what happened last year, but It's hard to see it making sense for comparison between times or place
by soVeryTired 9y ago
GDP might be useful for comparing what happened this year to what happened last year, but It's hard to see it making sense for comparison between times or places that are significantly different.
For one example of how the comparison breaks down, consider the cost of adding up a page full of numbers in 1950 vs. today. In 1950, you'd need to hire an accounting clerk. Nowadays it's essentially free.
In 1950, the clerk would have added the value of his labour to GDP, Today, the computer doing the same job contributes little or nothing.
The same problem crops up everywhere. If I develop a $1000/month treatement for hepatitis, I might add a vast amount to GDP. If I develop a $5 one-off cure, not so much.
GDP can't 'see' goods and services that are so cheap to produce that they're practically free.
- readittwice 9y agoDid you read the full article? They have an paragraph on that under the section Methodology. IMHO this addresses your concern. What's your problem with that reasoning?
- soVeryTired 9y agoThe only thing I can find is this: >The numbers for the map come from historian Angus Maddison who uses Sestertius records to find wheat equivalent figure for national disposable income and makes comparisons based off that. But all that says is that some guy used historical records for Roman income figures. It doesn't tell you anything about how to relate income in Roman times to income today.