4 ms·

Or would GDP be increased more (and more evenly distributed, both geographically and demographically) if the jobs in NYC or SV were all required to be remote? I

Or would GDP be increased more (and more evenly distributed, both geographically and demographically) if the jobs in NYC or SV were all required to be remote? Imagine if every small town in the country had HN types bringing money into the local economy instead of taking it out.

eru 5y ago
No. Increase in GDP means that someone is making more money. And you seldom have to _require_ anything to get people to make more money. Companies and workers already have the option to negotiate remote working arrangements. And had for a long time. > Imagine if every small town in the country had HN types bringing money into the local economy instead of taking it out. They'd just take it out to another 'local' economy. What makes some random spot more deserving than some other random spot? And in any case, on a macro scale there's basically as much money in the national economy as the Fed wants there to be. If there's some process that makes money magically vanish (eg perhaps those wacky foreigners selling you goods but then just burying the cash you pay them, instead of spending it), then the Fed will just issue more money to make up for the shortfall. Similarly, if those foreigners dig the money back up, the Fed will just sell a few items off their balance sheet to soak up the extra money.
- Nevermark 5y ago
  You are responding to arguments about GDP with arguments about money supply. Inflation adjusted GDP is a completely independent measure/concept/entity/quantity from money supply.
  - tonypace 5y ago
    Milton Friedman made a good career proving you wrong with his helicopter money. Dumping cash in human hands has real effects beyond increasing the price of everything. (I agree that the parent comment is unconvincing.)
    - Nevermark 5y ago
      I think we are in agreement. They are independent entities as measured state of an economy at single points in time. Money supply doesn't tell you what GDP is, or vice versa. Normalizing GDB for inflation is about removing even that connection. But as far as the dynamics of an economy everything is related to everything. Changes happening to one spill into effects on the other, although as we both know, often not in a simple way.
  - eru 5y ago
    Sorry, there were two strands of argument I was replying to. That might have gotten a bit confused. The first was about real GDP, and natural incentives vs legal requirements. The second was about money supply vs worrying about keeping money in the local economies.

eru 5y ago

No. Increase in GDP means that someone is making more money. And you seldom have to _require_ anything to get people to make more money. Companies and workers already have the option to negotiate remote working arrangements. And had for a long time. > Imagine if every small town in the country had HN types bringing money into the local economy instead of taking it out. They'd just take it out to another 'local' economy. What makes some random spot more deserving than some other random spot? And in any case, on a macro scale there's basically as much money in the national economy as the Fed wants there to be. If there's some process that makes money magically vanish (eg perhaps those wacky foreigners selling you goods but then just burying the cash you pay them, instead of spending it), then the Fed will just issue more money to make up for the shortfall. Similarly, if those foreigners dig the money back up, the Fed will just sell a few items off their balance sheet to soak up the extra money.

Nevermark 5y ago
You are responding to arguments about GDP with arguments about money supply. Inflation adjusted GDP is a completely independent measure/concept/entity/quantity from money supply.
- tonypace 5y ago
  Milton Friedman made a good career proving you wrong with his helicopter money. Dumping cash in human hands has real effects beyond increasing the price of everything. (I agree that the parent comment is unconvincing.)
  - Nevermark 5y ago
    I think we are in agreement. They are independent entities as measured state of an economy at single points in time. Money supply doesn't tell you what GDP is, or vice versa. Normalizing GDB for inflation is about removing even that connection. But as far as the dynamics of an economy everything is related to everything. Changes happening to one spill into effects on the other, although as we both know, often not in a simple way.
- eru 5y ago
  Sorry, there were two strands of argument I was replying to. That might have gotten a bit confused. The first was about real GDP, and natural incentives vs legal requirements. The second was about money supply vs worrying about keeping money in the local economies.