[pixelready]

The case against GDP, by its own creator: https://gnhusa.org/gpi/the-case-against-gdp-made-by-its-own-...

It’s not that GDP is a poor measure, just that it is isolated as the only measure most policy is based on improving rather than being one metric in a portfolio of related metrics that balance technological progress, accumulation of wealth, and human thriving.

As Gary Stephenson rightly points out the culture of Economics in modern practice is not one of open query and scientific skepticism, but of proselytizing. More akin to a religion than a science.

[numpad0]

IMO the problem with GDP is it's basically always normalized in USD, and USD isn't that universally representative of units of production/utility.

I mean, not to be political, but there's probably a place somewhere on Earth selling 10 standard chicken eggs for 540 local coins that's equivalent to $0.01 by the official government rates then-and-there, and the idea of GDP being meaningful means they must be either producing something like thousands of eggs per hour per employee or they live with something like a single pieces of chocolate worth of calories per day. And it's really not like that.

I'm sure GDP figures normalized on local consumer price index will have its own flaws, but especially USD-normalized GDP feels wrong to me in that regards.

[BurningFrog]

GDP just measures the average wealth of a society, on the assumption that production equals consumption. Wealth is unambiguously good, but of course it fails at measuring the full extent of human flourishing.

My take on Economists is that they keep desperately trying to make people understand that prices are set by supply vs demand dynamics, while society keeps refusing to understand it.

[sutterd]

Is wealth the right term here? I thought it was supposed to measure production, with the actual measurement usually spending (with qualifiers). And, when comparing countries, you have to account for the different currencies. Currencies are typically trade balanced, which gives a rough equivelence for buying power, but that is not true with the dollar because, as the effective reserve currency, it has international demand outside of trade.

[skybrian]

I suspect that the US having better investment opportunities than other countries (tech companies for example) might be more important than reserve currency status.

People tend to pay more attention to trade than investment, but investment flows are just as important. A trade deficit often means that foreign investors are buying and a trade surplus goes along with people investing in foreign countries.

[BurningFrog]

Something like "economic value" is probably a more precise term than "wealth".

[missedthecue]

GDP is useless! I prefer thing 96% correlated with GDP.