in a (limited) defense of GDP, no-one would pay $100 simply to have a question answered. Getting the answer has to be valuable to the asker in some way. (Say, Leonardo, what mistake am I making in trying to paint this ceiling? the paint keeps dripping off.) So the people in the story have to be doing something valuable for each other (and least from their perspectives).
Objectively speaking, however, it may not be valuable. If the money goes to help Michaelangelo paint a ceiling instead of to food, a high GDP could coexist with hunger. Laurent GUERBY wrote: >> Economic growth is already a metaphor. Before seeking greater clarity >> through specificity of the metaphor, it is useful to ask what the >> semantic limits of the metaphor are. Just what is it that "grows"? And >> in what sense is that growth "economic"? >> >> What grows are incomes and assets measured in dollars. Growth in >> income and assets has traditionally been associated with something we >> could call "prosperity" or "economic welfare," which are composed of >> subjective experiences and are thus unquantifiable. > > I wrote the following little story a while ago. I wonder > if it is taught to econ students. > > Laurent > http://guerby.org/blog/ > > """ > The solution for GDP growth and the end of hunger > > It's as easy as having one 100 USD banknote in the whole country. > > How? > > I asked an innocent question on Yahoo > > http://answers.yahoo.com/question/index;_ylt=AjWwgnpZBZwjnCvl9H0O3GUTxgt.?qid=20070404120530AACIvMp > > How to measure GDP in a simple setting? > > Assume that the economy has two people Alice and Bob, and no tax. > Alice has 100 dollars. Some day during the year she asks Bob a question > and Bob asks for 100 dollars for the answer. Alice pays 100 dollars to > Bob and Bob answers. Another day during the same year, Bob asks a > question to Alice and Alice asks for 100 dollars to answer. Bob pays 100 > dollars to Alice and Alice answers the question. No other economic event > happen in the economy during the year. My question: what is the yearly > GDP of this economy as would be measured by current standards? > > Answer given: > > Simply put $200 > heres why > gdp is the total amount of all final goods and services produced in > an economy each person produced $200 > the second way to look at is by totaling all wages earned which is > also $200 > > Which is $100 per person per year. > > Now let's assume all people in our poor country play this game: ask your > neighbour a question ("what time is it") and the price is $100, with no > tax applied (a "free" economy). At the end of the day, the $100 banknote > has been in the successive hands of all the people of the country and > goes back to its original owner. $100 per people of GDP has been > produced this day. Do it 365 days a year, you have a GDP of 365*$100 = > $36500. For reference France per capita GDP is $27600. > > So you just created a richer economy than France, and since you're rich, > there's no longer any hunger problem. > > Right? > > France has also 72% of its GDP in the service activity. And remember > that GDP as currently defined measures the speed of exchange of money. > """ > > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
