User:Pbmeyer/Comments on GDP for Mazzucato book discussion

Because of recent revisions, GDP no longer misses, as much:

• the contribution of R&D now makes to increasing later output
• the contribution of new films, and other "artistic originals", to later output (GDP)
• investments into making software which pays off later

But GDP still misses much of . . .

• effect of health expenditures now on later healthier effective workforce
• exhaustion of natural resources, which aren't usually on the balance sheet
• pollution and other "bads" with negative externalities, which cause later pain/trouble and reduced output
• care of children, housekeeping services, and other "home production" which is valued or creates value/output later
• contributions of primary and 2ndary education beyond their costs (because future value is not priced, and is uncertain)
• value of government R&D beyond its costs
• value of long-lasting infrastructure? I think
• various kinds of quality (e.g. for services) that isn't represented in price
• value in free/networked goods, e.g. free open-source software

Deep issues/problems beyond tradeoffs over time:

• (1) GDP counts higher prices as more output even if it's from market power

• FISIM is an example (inferences about value of financial institutions from their gross profits, the intermediation wedge)
• exploitation by private pharma companies of R&D by public sector insts
• Oil price fluctuations
• semi-monopolies e.g Microsoft -- classic market power

• (2) GDP is a measure of economic value of goods & services, leaving out much that people would value.

• (3) For output or productivity, it's necessary to have multiple measures to measure the different necessary things