<< Because all the economic activity takes place within the borders of Australia, therefore it needs to be counted as belonging to GDP >>

Yes, as GDP is defined.

But GDP shouldn’t be defined like this. GDP should be defined in order to give us the best possible indication of economic wellbeing and of the true prosperity that comes from a healthy economy, in the short term and projected into the long term.

Surely this NEEDS to be the basis of a good GDP measure. Surely the basic principle of just including all economic activity that takes place within this country is fundamentally flawed…as I have suggested in my 150+ posts on this thread!

<< The remedial work required after a flood employs many people, and consumes a great deal of material. Again, all this economic activity is simply business-as-usual for SES personnel, builders etc.,and is part of the GDP calculation - again, with the exception of imports. >>

Yes. So it would take quite a bit of working out as to just what is remedial activity which just replaces what was there before, what is activity that would make things better than they were before and what is secondary activity. But I’m sure that the experts could come up with a meaningful formula. And even if they don’t get it quite right, the resultant input into GDP would still be a whole lot more meaningful than it currently is.

<<…what exactly is it that you would like GDP to achieve? >>

We’ve thoroughly been over this on this thread. I think my third paragraph above explains it.

<< If you want to separate it into "good" GDP and "bad" GDP, then all you have to do is draw up a list of each, drop the expenditures in their appropriate categories, and off you go.>>

Hmmmm. Well, if we were to get the experts to formulate GDP so that it only includes the ‘good’ stuff, then we’d be on a winner.

But I thought you were of the view that there is no good or bad GDP, just GDP.

continued

So…. maybe you can see my point – that not all GDP is equal, and that there is indeed ‘good’ stuff, which is useful as a realistic economic indicator, and ‘bad’ or neutral stuff which shouldn’t get counted in GDP, and which badly biases the GDP number (and hence the per-capita GDP number) by getting included in it.

<< You will still have a problem when it comes to measuring the impact of immigration though. Would you count their contribution to the nations's economy as only "bad" GDP? >>

There would no doubt be problems all over the place in working out just what should be added to GDP to make it the best possible economic indicator.

The big thing about economic activity generated by immigration is of course that most of it is just duplication of services and infrastructure and increase in resource consumption in order to provide just the same standard of living for the new residents… all of which simply does NOT indicate a healthy economy. It is all NEUTRAL to our real economic wellbeing.

So most of the economic activity generated by immigration should be seen as neutral and not be added to GDP.

This, as I have said many times, is the biggest factor of all. All that economic activity that just duplicates all the basic requirements gets fully added to GDP, which ultimately gives us a HUGELY inaccurate measure of economic wellbeing, as it indicates directly that high population growth is very good for our economy and that higher growth is better and that we should maintain this forever.

So it is fundamental importance, above all else, that the NEUTRAL economic activity associated with population growth NOT be included in a best-indicator GDP.

No, Ludwig.

>>So…. maybe you can see my point – that not all GDP is equal<<

That is not only a ridiculous notion, but it also illuminates how little you have actually learnt from your copious posts on this thread, and my (mostly) extremely patient attempts to educate you.

This is your problem, in a nutshell:

>>But GDP shouldn’t be defined like this.<<

But it is. Anything else would not be GDP.

>>GDP should be defined in order to give us the best possible indication of economic wellbeing and of the true prosperity that comes from a healthy economy, in the short term and projected into the long term.<<

You may prefer an indicator of this type. But it would not be GDP.

>>Surely the basic principle of just including all economic activity that takes place within this country is fundamentally flawed<<

No, it is not. GDP is the indicator that includes all economic activity. Anything else would not be GDP.

>>But I thought you were of the view that there is no good or bad GDP, just GDP.<<

That's why I used inverted commas, Ludwig. They are your terms, not mine. There is only GDP. If you don't like it, use another measurement.

>>The big thing about economic activity generated by immigration is of course that most of it is just duplication of services and infrastructure<<

You forget, that these services and infrastructure are paid for through the increased economic activity. And they are not "duplication". They are in addition.

>>So most of the economic activity generated by immigration should be seen as neutral and not be added to GDP.<<

There is no such thing as "neutral" economic activity. Either there is economic activity, or there is not.

Since it is clear that you are merely posting for the sake of posting - as you are also doing on the Rolf Harris thread - I shall now leave you alone to continue to kid yourself that you understand even the simplest basic fundamentals of our economy.

You don't. And on this sad showing, you never will.

<< Anything else would not be GDP. >>

That depends on how the esteemed authorities may wish to define it. If they want to call it GDP, then it would be GDP.

<< You may prefer an indicator of this type. But it would not be GDP. >>

It would not be GDP as we currently know it.

<< …these services and infrastructure are paid for through the increased economic activity… >>

YES! The increase in economic activity spurred by population growth by and large goes into producing the stuff that that population growth needs…. with no gains for the existing community and hence no significant gains in prosperity. It is all +/-neutral!

<< …And they are not "duplication". They are in addition. >>

They are both. You can’t duplicate something without adding it to what already exists.

<< There is no such thing as "neutral" economic activity… >>

Oh yes there is. And there is good economic activity, which take us forward in terms of prosperity. And bad economic activity which takes us backwards, such as activity which causes a lot of pollution or illness or other bad consequences.

If you leave this thread at this point, I will take it I am cutting too close to the truth and that you do indeed see the merit of my argument.

So be it, Ludwig.

>>If you leave this thread at this point, I will take it I am cutting too close to the truth and that you do indeed see the merit of my argument.<<

But if you do, then you will be kidding yourself. You haven't the slightest understanding of basic economics. Or even simple logic, if it comes to that.

Face it, Ludwig. You have shown yourself to be woefully ignorant every step of the way. More importantly though, you have demonstrated a complete inability to comprehend even the simplest terms and concepts.

You may consider writing so many pointless, pontificating, not to mention frequently contradictory posts as demonstrating cleverness. But it is such a barren exercise, that in the final analysis it can only be described as mental masturbation.

You are probably too old to change your ways now, Ludwig. But if you are not, I strongly suggest that you do so.

Fascinating Pericles, given that there are many instances on this thread where I have agreed with you.

You know what, I reckon we agree to a very high extent on what GDP is and what it achieves.

Let’s take a look at that –

According to GDP, there is no good or bad, or neutral, economic growth. It is all treated as having just the same value.

GDP does not take into account, and cannot be used as an indicator, for all sorts of things, such as future prosperity, or any prosperity for that matter, health of the resource base or natural environment or urban environment or our quality of life.

GDP doesn’t include imports but it does include indirect economic activity generated via those imports.

GDP is in general lowered by disasters, injuries and illness, but economic activity generated by those things gets included in it.

GDP is a blunt tool. It measures gross domestic product. And that’s about all it measures. It is useful in comparing GDP over time, and of some value in comparisons with other countries.

I think we agree on all of this.

We’d also agree that if we wanted more meaningful indicators, which would be defined in quite different ways as to just what economic activity was included in them, then those indicators would not be GDP… unless we changed the definition of GDP accordingly.

Given all this agreement, why then are you so down-putting, my dear Peri?

After all of the discussion on this long thread, I reckon I can conclude that I have about the same level of understanding as you do (which is a fair bit more than I had to start with).

The essence of our disagreement seems to be that you are happy with GDP as our primary economic indicator, while I am most definitely not.

So.... is there anything here that you disagree with??