42 ms·
GDP = C + G + I + NX Since cities are centers of consumption (C) and government spending (G), and those that are ports do exporting (NX=net exports), the conce
by Merrill 7y ago
GDP = C + G + I + NX
Since cities are centers of consumption (C) and government spending (G), and those that are ports do exporting (NX=net exports), the concentration seems reasonable.
- pc86 7y agoGovernment spending doesn't add to GDP because government doesn't create the money it spends. All the money government has to spend and create value is a byproduct of what actually goes into GDP.
- atdrummond 7y agoUsing the expenditure method, the parent post is correct.
- deleted 7y ago[deleted]
- lordnacho 7y agoYou can discuss what ought to be counted, but the equation above is what is counted.
- rayiner 7y agoYou’re not quite correct but not entirely wrong either. You can measure GDP by measuring production, or measuring consumption plus investment and exports. (Everything that is produced must be either consumed, saved, or exported.) Government spending is one type of consumption that’s included in the GDP calculation. Obviously, however, a dollar of government spending will typically replace a dollar that would otherwise be consumed or invested.
- pjc50 7y ago> Obviously, however, a dollar of government spending will typically replace a dollar that would otherwise be consumed or invested. It may be "obvious", but is it true? There's quite a bit of economics suggesting that it isn't, ranging from multiplier effects and orthodox Keynsianism ("reserve army of the unemployed") to more surprising claims from the MMT wing.
- lonelappde 7y agoConsumption = Production. You can count either side and get the same total.