GDP growth is a poor measure of improving living standards.

[RandomGuy]

The economist is having another interesting debate for nerds.

"the house" is the economists editorial position for the debate. Pro and con get a champion, and a couple of essays to rebut each other.

http://www.economist.com/debate/debates/overview/171

Maybe you think it is interesting, maybe not.

This came up recently in talks about how to spur "investment" and just what that actually means to the economy.

[DarrinS]

Oh, you don't say?

But you were all over GDP as some kind of damn standard just a week ago.

[L.I.T]

GDP is a poor measure for improving living standards; at least with regards to developing nations.

For developing nations there are too many system inefficiencies and inequalities to warrant focusing solely on pushing GDP as the primary motivation for increasing wealth across the board. Asset allocations is chief among them.

Developing nations also are rarely, if ever, consumption driven economies, for which rapid GDP growth could serve.

Addendum: Looking at GDP growth (the number) without regards to breaking down the component parts and analysing them individually is, as well, misleading.

[angrydude]

GDP is a poor measure for improving living standards; at least with regards to developing nations.

For developing nations there are too many system inefficiencies and inequalities to warrant focusing solely on pushing GDP as the primary motivation for increasing wealth across the board. Asset allocations is chief among them.

Developing nations also are rarely, if ever, consumption driven economies, for which rapid GDP growth could serve.

Addendum: Looking at GDP growth (the number) without regards to breaking down the component parts and analysing them individually is, as well, misleading.

There is no fundamental difference between "consumption based" economies and other types. The same things that produce growth in 3rd world countries produce growth in so called "modern" economies. We just have the luxury of an over abundance of credit here that permits us to consume like we do.

[LnGrrrR]

Oh, you don't say?

But you were all over GDP as some kind of damn standard just a week ago.

Reading Fail.

Actually look at the link and maybe you can figure out why.

[LnGrrrR]

For the record, I think the debate isn't clearly stated. As mentioned by the person defending it, the GDP at it's core ISN'T a measure for determining living standards, but economical input/output.

If the debate were changed to something like, "Shouldn't be used as a factor in living standards" or something similar, that's different.

[L.I.T]

There is no fundamental difference between "consumption based" economies and other types. The same things that produce growth in 3rd world countries produce growth in so called "modern" economies. We just have the luxury of an over abundance of credit here that permits us to consume like we do.

The inputs are the same in measuring GDP, of course. But the focus of economic growth is different between developed nations (such as the US) and developing nations.

The inputs may be the same in the calculation, but there are structural differences between economies.

[RandomGuy]

Oh, you don't say?

But you were all over GDP as some kind of damn standard just a week ago.

Not exactly. I simply asked what effect a certain transaction would have on GDP, and made no representations as to the validity. It is a measure but not the only measure of whether an economy is healthy/productive.

I thought you might find this interesting to see that there is some debate about whether it is a good measure of ultimate living standards.

My point though, still stands. Most people who call themselves "free-market conservatives" tend to know little about the study of economics, usefulness of the specific form of GDP aside.