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by cpleppert
1033 days ago
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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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