GDP : Missing “home” production and “smarts”
Posted by Dave Bath on 2007-06-12
While the US GDP is usually seen as "healthier" than the EU, different work patterns (productive activity that is not paid) and knowledge accumulation are not handled by the traditional GDP.
So here are a few tasters that hopefully will tempt you to read the article:
The good cooking of Italian mothers does not enter into Italian GDP, bad McDonald’s meals enter in US GDP
When Europeans do not work, they are not only enjoying the good life. A good portion of time spent away from the market is spent working at home, more so in Europe than in the US.
This doesn’t give any reasons why the GDP (even with their twiddling) is that great a measure of well-being. It’s hard to factor in the different efficiencies in health-care spending, for example. I’m no fan of the GDP and would like to see more use of metrics mentioned in other posts in this blog (here and here).
Still, it’s good to hear of some specific criticisms of the GDP within its own paradigm. I’d like to see VoxEU come up with other ways of fudging GDP to make it more meaningful for comparison.