Forum Post: GSP Goods and Services Product
Posted 11 years ago on June 20, 2012, 8:40 p.m. EST by MattLHolck
(16833)
from San Diego, CA
This content is user submitted and not an official statement
the GDP (gross domestic product) is the total money the sloshes around in a system.
That system is often tied to a nation such as the US.
The GDP measure the total of the money transactions and has been used as an indicator for the health of the working economy.
I submit that the GDP is biased because trades of stock and money do not create any real economic change of goods and services.
If we are to observe a working economy I suggest the indexed only include money when goods and services are exchanged,
I am naming that index GSP ( Goods and Services Product)
In “confessions of an economic hit man” Perkins makes the point that GDP doesn’t tell you much since it says nothing about the distribution of wealth either. It’ s a good book.
http://books.google.com/books?id=nJFFrLX-924C&printsec=frontcover&dq=confessions+of+an+economic+hit+man&source=bl&ots=fzmGOiee7f&sig=8_VUiWG3uDucAS-73uecrlFc2ag&hl=en&sa=X&ei=d-UoUJrJCOaNyAH9_YGQBw#v=onepage&q=GDP&f=false
I once did some research on how GDP is computed, especially for things like calculating the inflation rate. If a lawyer is paid $200k instead of $50k, does the GDP go up or is it just inflation?
I think for many categories of services, that counts as "higher GDP" which obviously could be misleading.
But anyway, it's not really too important if we don't need to use the "GDP" number for anything.