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A Better Measure than GDP

Written by Gary North on April 24, 2014

My friend Mark Skousen for two decades has argued that the GDP statistic is incomplete. It’s misleading as a stand-alone statistic. It’s based on Keynesian demand-side assumptions. What is needed is a supply-side approach.

He offered it. Sadly, it was ignored for years. But in an amazing development, the federal government has now adopted it as an addition to GDP. The government will be releasing this statistic from now on. It’s called Gross Output.

I say, ‘It’s about time.” “Better late than never.”

It illustrates my motto: “You can’t beat something with nothing.” Now we have something.

The Wall Street Journal ran his article on it.  Click the link.

Continue Reading on online.wsj.com

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6 thoughts on “A Better Measure than GDP

  1. Even Stiglitz highlights failures of GDP. And our long time friend, Tom Woods w/ Jeff Herbener.

    https://www.youtube.com/watch?v=QUaJMNtW6GA

    https://www.youtube.com/watch?v=nQMmpLqIWiE

  2. The only problem with Gross Output is that the final numbers mean nothing except as an index. Products starting as raw materials are counted multiple times. If you mine copper, it is counted when it is sold to a refiner. When it is refined, it is counted when it is sold to a wire mill. When the wire is sold to a manufacturer, it is counted again. And so on. So it becomes an index to compare against previous periods. Accepting that limitation, it is useful. See my blog at http://cranky-conservative.blogspot.com

  3. Phillip the Bruce says:

    Biggest problem I have with "GDP" is that it includes gunverment spending, as if that were productive. It would be more accurate if gunverment spending were subtracted from the subtotal of all other 'production' rather than added.

  4. Holy Shirt says:

    Is Washington's adoption of Keynesian economic theories (that Keynes himself refuted prior to his death) surprising?

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