Arthur Grimes

I mean, there's nothing particularly new here except it's sort of running some sort of Panglossian utopian scenarios.

So GDP is a measure of everything that's produced within the borders of the country.

So it's gross domestic product.

None of the letters GDP make sense to an economist.

Gross means that we're not deducting depreciation of capital and things, which obviously we should.

So

We should think in net terms rather than gross terms.

Domestic means what's produced within the borders of New Zealand, but rather we should be interested in what goes to New Zealanders.

So that would be with the letter there would be N for national.

And we shouldn't be worried about what's produced.

We should be worried about the income that comes from it.

In the past, we produced lots of wool, but no one wanted to buy it.

That was production, but it wasn't income because not anybody paid any decent price for it.

So, we'd want to use income.

Not many people around the world now use gross domestic product as a measure of certainly of welfare or wellbeing.

If you're gonna use national accounts, you use net national income, which is takes off depreciation accounts just for the people in the country and it's income rather than production.

So GDP is a very old fashioned sort of concept even to economists.

If you look at World Bank or any of these, they're always, they normally talk about gross national income or net national income.

Yeah, exactly, exactly.

I always cringe when I hear New Zealand politicians talk about we must increase GDP.