Good point.
At 23:09 9/05/05, you wrote:
Robert Scott Gassler wrote:
> The main point about GNP or GDP is that it is > supposed to be a measure of > how much junk is produced.
And my point would be that the GDP doesn't even measure that. You could produce less junk and still have the GDP go up with medical costs, police and incarceration costs, advertising, higher extraction costs for scarcer natural resources and so on. The GDP, by virtue of its high visibility, introduces a sort of political moral hazard into public accounts. It would be political suicide for a government to do good things that incidentally shrunk the GDP. Look at what happened to Jimmy Carter for just musing about the "malaise."
As a matter of fact, I think "malaise" would be a good name for the moral hazard that the GDP engenders.
The Sandwichman
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Robert Scott Gassler Professor of Economics Vesalius College of the Vrije Universiteit Brussel Pleinlaan 2 B-1050 Brussels Belgium
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