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Nobody makes any policy decisions based on GDP. It's just a proxy of economic activity. Nobody ever said, We (won't) need policy X because we are at Y GDP. C
by deltree7 4y ago
Nobody makes any policy decisions based on GDP.
It's just a proxy of economic activity.
Nobody ever said, We (won't) need policy X because we are at Y GDP.
Companies make decision based on supply/demand.
So, this whole research is kinda pointless.
In fact the worst thing anyone could do is have a metric and make the entire nation focus on that.
- transcriptase 4y agoTell that to the Canadian government. It currently considers massive deficits fine because of our debt-to-GDP ratio, despite GDP being driven by a real estate bubble for the last several years.
- opportune 4y agoThe Canadian government is also growing their tax base/GDP quickly due to high levels of working-age immigration, not just real estate
- bee_rider 4y agoIs there a requirement to keep the debt-to-GDP ratio below some cap or something? Or is this just the reason the give when questioned about it by the media, etc?
- transcriptase 4y agoIt’s the reason given, usually in comparison to other G7 countries.
- kornhole 4y agoIt is not just Canada. The US and other countries justify their debt levels by this and it is used by bond traders to measure health of bonds issued. Military spending as percentage of GDP is also cited. So if military spending and borrowing ability is pegged to GDP, you can see why we pump it up as much as we can as distorted as it is on a nation's internal well being.
- deltree7 4y agoOnce again show me an economic policy that is tied to GDP
- deleted 4y ago[deleted]
- pishpash 4y agoThat's so laughable a statement I don't know where to begin. Maybe the private sector cares about it less (questionable in itself given how the stock market obsesses over recession signals) but governments absolutely use GDP for policy decisions.
- deltree7 4y agocan you name one, please?
- farseer 4y agoDeficit spending, as other posters have pointed out is perhaps one of the biggest policy decision all governments take every year. Its always presented as a percentage of GDP to make it palatable.
- deltree7 4y agoAgain, Can you name one law which ties deficit spending to GDP? Newsflash, We did deficit spending when ratio was 0.2, 0.4, 0.6, 1.0, 1.2 We will do deficit spending when ratio was 1.4, 1.6 or 2
- dopidopHN 4y agoI’m under the impression that country that are under some IMF settlement process can have a GDP policy tack to a loan. But I might be wrong, maybe it’s primarily and essentially budget cuts. At least the GDP is used as a justification metric. I think we will naturally grow out of it. Taking economics 101 in a French high school 20 years ago… I was already told it was a imperfect peace of information that have to be compounded.
- mgfist 4y agoChina has literal GDP targets. Yes it's very dumb
- JumpCrisscross 4y ago> Nobody makes any policy decisions based on GDP Voters respond to GDP prints. See the hand wringing and pearl clutching around whether or not we're in a recession. If voters care about it, politicians do too.
- anikom15 4y agoI think the price of food and gas compared to take-home pay has a lot more weight than any stat-pushing.
- n4r9 4y agoHere in the UK, the previous prime minister Liz Truss introduced a raft of policies based on stimulating economic growth. I don't know what this means, if not boosting GDP, but perhaps someone can show me otherwise. It even got to the point that less right-wing parties were labelled as the "anti-growth coalition".