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Eh I think the intuition the parent is trying to get at is that GDP is really in some sense a measure of flow, that is it is a measure of quickly money is excha
by dwohnitmok 9y ago
Eh I think the intuition the parent is trying to get at is that GDP is really in some sense a measure of flow, that is it is a measure of quickly money is exchanging hands weighted by how much money is being exchanged. Hence it feels more akin to comparing something like joules to watts rather than comparing the same dimension of two non-like things.
Put another way, yes Jeff Bezos could more than double the GDP of the country in question if he donated his entire net worth as someone else's income. But so could someone with a trivial sum of money (say a single U.S. dollar) by creating a series of dummy transactions with someone else where they constantly exchange the same sum of money back and forth for dummy "services." Yet at some level it seems weird to compare Jeff Bezos with this hypothetical person.
That being said, that's just an intuition. GDP is actually calculated as a dollar amount not a rate. As such I think there's still some worthwhile explanatory value in using GDP as a measure against static monetary amounts in the same way that you can say "this swimming pool has the same amount of water as the amount of water that flows over Niagara Falls in a day" (to the best of my knowledge such a large pool does not exist).