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GDP is literally a measure of aggregate production. The entire point of GDP is to measure production in an economy. GDP does not measure money any more than mas

GDP is literally a measure of aggregate production. The entire point of GDP is to measure production in an economy. GDP does not measure money any more than mass measures kilograms. It measures the value of all goods and services produced in the economy.

charles_f 3y ago
> GDP is literally a measure of aggregate production In $, not amount of goods and services. > GDP does not measure money any more than mass measures kilograms. Mass is a physical dimension. GDP is the product of the physical dimensions of the goods and services you product by the value attributed to these physical properties. > It measures the value of all goods and services produced in the economy. You're saying it yourself: it measures the value of the goods and services. Value is measured in money and is not directly linked to the volume of goods, resources and services they represent. You can produce the exact same amount of potatoes, if the value of a kg of potatoes increases, the GDP rises. If you look at the value of oil to gauge its production, there's one day in 2020 when we sent oil back to earth[1]. 1: https://www.bbc.com/news/business-52350082 https://www.bbc.com/news/business-52350082
- cpleppert 3y ago
  When economists talk about production in the context of an economy they always mean the value of that production. Economic growth never implies the raw quantity of economic production increased regardless of its value. That's a contradiction in terms. If an economy increases production of some finished good by 50% yet the value of that finished good declined that was not economic growth it was a contraction. Economic growth literally means the value of goods and services produced by the economy rose. It does not mean "monetary value" in one place or "number of widgets" in another place. Robin Hanson is not confused here by what he means by economic growth and his argument does not rely on some ambiguity in terms. >>You can produce the exact same amount of potatoes, if the value of a kg of potatoes increases, the GDP rises. Yes, of course. >>If you look at the value of oil to gauge its production, there's one day in 2020 when we sent oil back to earth[1]. I'm not sure what this is supposed to illustrate. If a finished good or service does not have value then it cannot contribute to economic growth. The entire point of an economy is to produce goods that have value.
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User23 3y ago
Not exactly. The definition of GDP is: GDP=C+G+I+NX where: C=Consumption G=Government spending I=Investment NX=Net exports The production implied by C, G, and NX, is merely a lower bound. Excess production isn't capture in the GDP equation.

charles_f 3y ago

> GDP is literally a measure of aggregate production In $, not amount of goods and services. > GDP does not measure money any more than mass measures kilograms. Mass is a physical dimension. GDP is the product of the physical dimensions of the goods and services you product by the value attributed to these physical properties. > It measures the value of all goods and services produced in the economy. You're saying it yourself: it measures the value of the goods and services. Value is measured in money and is not directly linked to the volume of goods, resources and services they represent. You can produce the exact same amount of potatoes, if the value of a kg of potatoes increases, the GDP rises. If you look at the value of oil to gauge its production, there's one day in 2020 when we sent oil back to earth[1]. 1: https://www.bbc.com/news/business-52350082 https://www.bbc.com/news/business-52350082

cpleppert 3y ago
When economists talk about production in the context of an economy they always mean the value of that production. Economic growth never implies the raw quantity of economic production increased regardless of its value. That's a contradiction in terms. If an economy increases production of some finished good by 50% yet the value of that finished good declined that was not economic growth it was a contraction. Economic growth literally means the value of goods and services produced by the economy rose. It does not mean "monetary value" in one place or "number of widgets" in another place. Robin Hanson is not confused here by what he means by economic growth and his argument does not rely on some ambiguity in terms. >>You can produce the exact same amount of potatoes, if the value of a kg of potatoes increases, the GDP rises. Yes, of course. >>If you look at the value of oil to gauge its production, there's one day in 2020 when we sent oil back to earth[1]. I'm not sure what this is supposed to illustrate. If a finished good or service does not have value then it cannot contribute to economic growth. The entire point of an economy is to produce goods that have value.

deleted 3y ago

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User23 3y ago

Not exactly. The definition of GDP is: GDP=C+G+I+NX where: C=Consumption G=Government spending I=Investment NX=Net exports The production implied by C, G, and NX, is merely a lower bound. Excess production isn't capture in the GDP equation.