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National GDP is the yearly sum total monetary value of goods and services, but an economist's definition of 'productivity' is the value of labor output per unit input (hours worked). As framed, we're not comparing apples to apples, but the question seems more about whether GDP reflects 'true productivity'. Economists argue endlessly about what 'true productivity' is.
Yet, one key sub-issue is whether services are really as valuable as goods. Is a $100 hair cut really worth as much as a $100 vacuum cleaner? Maybe not. Or on a national level, why with the world's largest GDP is the U.S.A. still dead last in trade deficit by an enormous margin? Services are harder to export than goods, but the size of that gap still seems kind of fishy, as it reflects how much the rest of the world values U.S. output, doesn't it? Goes with the feeling that Americans charge for massages and peddle financial paper everywhere, but they don't make 'things' any more.
But let's try to bound the problem. On a whim, let's suppose we start with GDP but, to get a better handle on 'true productivity', you have to subtract off yearly trade deficit and yearly increases in national public and private debt. If so, U.S. GDP is now about $14 Trillion. Its public debt grew in 2008 by ~$1.8Trillion, private debt by ~$3 Trillion. So, our trial formula suggests that U.S. 'true productivity' was only $8.8 Trillion, or ~63% of nominal GDP. Goods constituted 1/3rd of U.S. GDP or $4.7 Trillion, which suggests that the remaining $9.3 Trillion of U.S. services was really worth only $4.1 Trillion, or 44% as much as U.S. goods, in terms of 'true productivity'.
One may validly critique such a simple trial formula in many ways. Yet, it does yield an estimate of the true value of services that seems intuitively to be 'in the ballpark', i.e., not zero but, at slightly less than half, certainly not on a par with goods. Such a valuation also goes a long way to explain the U.S. trade deficit, as well as other seemingly inconsistent sets of facts gleaned from 'official' government stats.
What else can I help you with?
Does GDP accurately reflect the nations welfare?
The gross domestic product, GDP, does not accurately reflect the nations welfare. It does provide an indication of the nation's economy, but it is only one of the component's of the well-being of a country. The GDP does not take into account household production, excluded production, and negative production.
How do changes in the GDP deflator accurately reflect changes in the prices of goods and services?
Changes in the GDP deflator accurately reflect changes in the prices of goods and services by measuring the overall price level of the economy. The GDP deflator accounts for inflation or deflation by comparing the current prices of goods and services to a base year. When the GDP deflator increases, it indicates that prices have risen, and when it decreases, it suggests that prices have fallen. This helps economists and policymakers understand how inflation or deflation is impacting the economy.
Advantages and disadvantage of using the GDP as a measure of productivity and economic health?
The advantages of using GDP as a measure of productivity and economic health is that GDP is universal and can be used to measure an economy's growth or decline. The disadvantage of using GDP as a measure of productivity and economic health is that it does not effectively measure the quality of products.
What is a nation's gross domestic product?
Gross domestic product or GDP is a valuable summation of nations economic productivity. The simple formula for deriving GDP is adding a nation's total currency value of consumption, investment, government expenditures and net exports together.
How do capital and human capital increases the GDP wealth and income of nations?
how do capital and human capital increase the gdp wealth and income of nations
Does GDP accurately reflect the nations welfare?
The gross domestic product, GDP, does not accurately reflect the nations welfare. It does provide an indication of the nation's economy, but it is only one of the component's of the well-being of a country. The GDP does not take into account household production, excluded production, and negative production.
How do changes in the GDP deflator accurately reflect changes in the prices of goods and services?
Changes in the GDP deflator accurately reflect changes in the prices of goods and services by measuring the overall price level of the economy. The GDP deflator accounts for inflation or deflation by comparing the current prices of goods and services to a base year. When the GDP deflator increases, it indicates that prices have risen, and when it decreases, it suggests that prices have fallen. This helps economists and policymakers understand how inflation or deflation is impacting the economy.
Advantages and disadvantage of using the GDP as a measure of productivity and economic health?
The advantages of using GDP as a measure of productivity and economic health is that GDP is universal and can be used to measure an economy's growth or decline. The disadvantage of using GDP as a measure of productivity and economic health is that it does not effectively measure the quality of products.
Does Austria has a gdp?
Yes. GDP stands for Gross Domestic Product, all nations have a GDP
What is a nation's gross domestic product?
Gross domestic product or GDP is a valuable summation of nations economic productivity. The simple formula for deriving GDP is adding a nation's total currency value of consumption, investment, government expenditures and net exports together.
How do capital and human capital increases the GDP wealth and income of nations?
how do capital and human capital increase the gdp wealth and income of nations
Why do economists use real GDP rather than nominal GDP to measure growth?
Real GDP reflects output more accurately than nominal GDP by using constant prices.
What is more than half of the growth of real GDP in the US caused by?
increases in the productivity of labor.
When you increase human capital does it increase or decrease productivity?
if employees perform well, the GDP increases
Why real GDP is demand-determined?
Because real GDP compares gross income of different years with one year's prices (to better reflect the change), and since prices are demand-determined, so is GDP.
What can a Real GDP show about an economy?
The total GDP (or Gross Domestic Product), of a country, is indicative of the productivity of its workforce. One can divide the GDP (in dollar amounts, for example) by the population of a country, and find the resulting productivity (in dollars) per person, per year, by this method.
Which two nations combined GDPs equaled about half the U.S GDP?
RUSSIA
