Subject: Is Gross Domestic Product Meaningful?

From: Shlomi Fish <[email-masked]>
Date: Thu, 27 Feb 2003 14:34:53 +0200 (IST)

Are discussions of Econmics theory on-topic here? If not, please quietly
move this discussion to Philosophy-IL.

We often here mentioning of Gross Domestic Product (GDP) or Gross National
Prodcut (GNP) in the news. I always assumed it meant exactly that: the
amount of goods that were manufactured in a country within a year.
However, the exact ways to calculate it is a bit different:

http://www.pitt.edu/~jduffy/econ110/lec4/tsld001.htm

Based on this, my father told me that if he and I start a country and he
sells me something meaningless for $100, then our country will have a GDP
of $100.

I got to this even crazier attack: let's suppose he sells me a piece of
paper for $1,000,000 dollars and I sell him a different piece of paper for
$1,000,000. That way, we will have a GDP of 2 million dollars. And I can
increase the GDP ad-infinitum this way.

Can anyone clarify this thing a bit?

Regards,

	Shlomi Fish

----------------------------------------------------------------------
Shlomi Fish        [email-masked]
Home Page:         http://t2.technion.ac.il/~shlomif/

My opinions may seem crazy, but they all make sense. Insane sense, but
sense nonetheless.

---

From: "Nadav Har'El" <[email-masked]>
Date: Thu, 27 Feb 2003 15:01:03 +0200

On Thu, Feb 27, 2003, Shlomi Fish wrote about "[hackers-il] Is Gross Domestic Product Meaningful?":
> 
> Are discussions of Econmics theory on-topic here?

Probably not :)

> increase the GDP ad-infinitum this way.

And where does your country's people get the $1,000,000 needed to start
this craziness? I assume they won't use American Dollars, but something
else, say "Fish Mish". If you sell one another pieces of paper for
1,000,000 Fish Mish, pretty soon one of you will realise that he can
buy a piece of paper from another country (say, the surrounding Israel)
for 1 shekel - prompting an exchange rate of 1,000,000 Fish Mish per
NIS. So your fancy economy with millions of Fish Mish GDP is actually
one of a few shekels :)

-- 
Nadav Har'El                        |    Thursday, Feb 27 2003, 25 Adar I 5763
[email-masked]             |-----------------------------------------
Phone: +972-53-245868, ICQ 13349191 |How do you get holy water? Boil the hell
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