Wow! Could that have been a MAJOR assumption by many? That Informational age commerce was included in the GDP formula? Misleading on purpose? at one point in this decade (when I was studying Macro and Micro Economics) Walmart was accountable for 10% of US GDP and 2% of the Global GDP.
So eBay, Amazon..AND GOOGLE just to name a few were/are included in that formula right? or no? (I would have known 6 years ago).
Great points Rob. oh my head is spinning form trying to figure this out.
I think the economists will have to understand in FULL (a CONTINUOUS PROCESS) the happenings of the informational age NOW AND Ahead of the curve to make timely adjustments (again a continous process).
This should have been asked to President Obama yesterday and ANSWERED!
Rob I totally agree with your assessment on how the government determines GDP and desperately needs revamping. In as much as we would love to believe that the GDP grew at the rate 5.5% in the 4th quarter of 2009, it was due largely to the replacement costs associated with restocking depleted inventories.
Furthermore and more importantly, GDP is a backward looking economic metric, and rather unable to show any true future trend. Economists have determined that this specific number (5.5%) will be an outlier and have no bearing going forward.
But more to your point, it took 100 years to recognize the uselessness of GNP (gross nat'l product) as it never considered international sales among other things. So, sadly it may take some time for the government to acknowledge cost savings associated with the use of Internet as contribution to the GDP.
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