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> You can set up two shell companies and have them buy and sell the same paper clip between them thousands of times a second, for a million dollars each. In th
by tuatoru 4y ago
> You can set up two shell companies and have them buy and sell the same paper clip between them thousands of times a second, for a million dollars each.
In the case of used goods, the only effect on GDP comes from the transaction fees paid to the broker. Same with buying an already existing house: the GDP contribution is the real estate and legal fees.
And with the stock and bond markets: a trillion dollars' worth of stock changing hands only affects GDP to the extent of the brokerage fees, maybe a billion, maybe less.
- boole1854 4y agoAnd in the case of new goods, only the final product sold to consumers or held in inventory at the end of the accounting period counts towards GDP. Intermediate inputs do not count. So one paper clip sold one million times counts as one paper clip.