The Problem with the Gross Domestic Product

Paper Summary:

This paper looks at the faulty methods used for determining the GDP. It points out that the GDP is the result of forecasts made by various public agencies at different times of the year. The paper also looks at the view held by many economists that the GDP is largely based on the purchase of imaginary items. Finally, this paper explores the problem of the faulty assumptions used to determine the value of goods and services.

From the Paper:

"Another problem is also inherent in the GDP. When figuring the value of all the goods and services included in the GDP, assumptions are made about how long it takes people to create those goods and services. The thing is, polls have shown that the average workweek in 2000 was more than ten hours longer than in the early 1970s. And commentators point out that these days, so much work is done away from the work site because of laptop computers and so on, that even that estimate may be way out of whack. That seems that it could make for a skewed result, to say the least. "

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