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GDP produced divided by costs required measures intensity. These will be typically normalized (inflation removed) or, if a ratio, can be nominal since both have
by tomrod 10mo ago
GDP produced divided by costs required measures intensity. These will be typically normalized (inflation removed) or, if a ratio, can be nominal since both have the inflation ratioed out.
GDP is known to be an imperfect measure, especially for capturing cottage industry and due to the distribution effect you described, but it's not horrible to start with.
- BurningFrog 10mo agoGDP is how much wealth is produced in society at a moment in time. The total accumulated wealth in a society is a related but entirely different number.
- tomrod 10mo agoThis is why it measures intensity. It is a flow.