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GDP in itself is a faulty measure. One easy way to increase it to ask everyone to throw a brick through their neighbours window. The spend on window repair will
by oxfordmale 4y ago
GDP in itself is a faulty measure. One easy way to increase it to ask everyone to throw a brick through their neighbours window. The spend on window repair will increase the GDP, although there is no value add to the economy, other than the glass fitters of course.
- zerr 4y agoIt would show that there are enough resources to fix the windows.
- HenriTEL 4y agoYes, and that's likeky to have an impact on later GDP values, as all that has not been spent on better investments than repairing windows. Except for the UK that has terrible windows and a proper upgrade would lead to serious reductions of gaz imports, that are likely to sting this winter.
- derriz 4y agoOnly if you assume everyone is sitting around doing nothing waiting for window repair work to arrive. More likely is that the effort and resources required to fix the windows will displace other economic activity which would have contributed positively to GDP numbers.
- JumpCrisscross 4y agoGDP is a flow measure. If you drain a dam the flow will increase for a while before you deplete your stock. There are stock measures of the economy, though they're difficult to estimate because an asset's value is only truly known when it is transacted. (And even then in a highly particular way.) One way to think about our capital markets is as an ongoing value-of-the-economy machine (or at least a subset thereof).
- alickz 4y agoWikipedia link if anyone wants to read more on broken window economics. https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window