GDP, growth and ecology: why is it blocking?
published: 17/09/07, 10:55
Here is a small reflection of the beginning of the week which could explain many things about the current blockages at the level of political decisions in favor of the environment.
I would like to start a common reflection by trying to be the most accurate (according to my weak knowledge in economics), clear and concise possible ...
1ere part: the paradoxes of the GDP
You all know that the only The economic index that interests the policies is GDP.
GDP does not measure wealth (in the capital sense) since it measures the amount of value added, ie industrial production and trade (although 2 is linked, but it is not wealth, see example below).
Thus, economists are satisfied with this index which does not measure wealth to measure the good economic health of a country: the famous GROWTH.
Urban artist laughable thing, GDP is not corrected by inflation, so do you think we can talk about growth when GDP is 2% while inflation over the same period is 3%?
This is the 1er paradox of GDP: it is not corrected by inflation.
In addition, this famous inflation is also completely distorted, for example, it does not take real estate into account ... otherwise it would date or even exceed the 2 figures! Should not panic the crowds (and turn the printing press too much) ... and that would induce considerable increases in wages (of the same order as real inflation) to remain at the same famous "purchasing power" ...
In this context more than before: the owners get richer, tenants (or new owners renters of their banker) impoverished ... But real estate is not the subject of debate.
But one thing is more certain: taking into account all the corrections, the decay would be there ...
Example
Let's take a small example to better understand the heresy of GDP, example related to the familly bubble:
a) A well-off family has the means to do food shopping (for example) for a duration of 1 months + 1 day. During this month, she will not buy anything and therefore its contribution to GDP will be NIL.
b) A family b) much more modest, single-parent, the mother alternating the interim period manages her budget as best she can in "tight flow". So she has to do her shopping every 3 days because she obviously cannot store large quantities since she simply does not have the necessary funds.
Over a period of one month, family b) will have contributed significantly to GDP.
This example can very well be reported at the scale of a country, thus according to the single criterion of the GDP, the family b), poorer, is in better shape, lives better and is by analogy (in the spirit of the media and people) is richer than the family a), easy... and this is true even if the family a) spends 10 times more than the family b) ...
This is the 2ieme paradox of GDP: the inability to estimate a wealth capital
Conclusion: we can therefore say that the GDP can estimate the enrichment and the economic activity of a country over a given period but in no case neither the capital nor the wealth of this country, but of course the exchanges depend on the capital (mining, agricultural, industrial, tourist ...).
Corollary: Why is economic decline so scary since it is not synonymous with poverty?
Edit, here are the corresponding 2 news:
https://www.econologie.com/pib-croissanc ... -3484.html
https://www.econologie.com/pib-developpe ... -3483.html
I would like to start a common reflection by trying to be the most accurate (according to my weak knowledge in economics), clear and concise possible ...
1ere part: the paradoxes of the GDP
You all know that the only The economic index that interests the policies is GDP.
GDP does not measure wealth (in the capital sense) since it measures the amount of value added, ie industrial production and trade (although 2 is linked, but it is not wealth, see example below).
Thus, economists are satisfied with this index which does not measure wealth to measure the good economic health of a country: the famous GROWTH.
Urban artist laughable thing, GDP is not corrected by inflation, so do you think we can talk about growth when GDP is 2% while inflation over the same period is 3%?
This is the 1er paradox of GDP: it is not corrected by inflation.
In addition, this famous inflation is also completely distorted, for example, it does not take real estate into account ... otherwise it would date or even exceed the 2 figures! Should not panic the crowds (and turn the printing press too much) ... and that would induce considerable increases in wages (of the same order as real inflation) to remain at the same famous "purchasing power" ...
In this context more than before: the owners get richer, tenants (or new owners renters of their banker) impoverished ... But real estate is not the subject of debate.
But one thing is more certain: taking into account all the corrections, the decay would be there ...
Example
Let's take a small example to better understand the heresy of GDP, example related to the familly bubble:
a) A well-off family has the means to do food shopping (for example) for a duration of 1 months + 1 day. During this month, she will not buy anything and therefore its contribution to GDP will be NIL.
b) A family b) much more modest, single-parent, the mother alternating the interim period manages her budget as best she can in "tight flow". So she has to do her shopping every 3 days because she obviously cannot store large quantities since she simply does not have the necessary funds.
Over a period of one month, family b) will have contributed significantly to GDP.
This example can very well be reported at the scale of a country, thus according to the single criterion of the GDP, the family b), poorer, is in better shape, lives better and is by analogy (in the spirit of the media and people) is richer than the family a), easy... and this is true even if the family a) spends 10 times more than the family b) ...
This is the 2ieme paradox of GDP: the inability to estimate a wealth capital
Conclusion: we can therefore say that the GDP can estimate the enrichment and the economic activity of a country over a given period but in no case neither the capital nor the wealth of this country, but of course the exchanges depend on the capital (mining, agricultural, industrial, tourist ...).
Corollary: Why is economic decline so scary since it is not synonymous with poverty?
Edit, here are the corresponding 2 news:
https://www.econologie.com/pib-croissanc ... -3484.html
https://www.econologie.com/pib-developpe ... -3483.html