Real GDP: The Flawed Metric at the Heart of Macroeconomics
Jonathan Nitzan () and
EconStor Preprints from ZBW - Leibniz Information Centre for Economics
The study of economic growth is central to macroeconomics. More than anything else, macroecon-omists are concerned with finding policies that encourage growth. And by ‘growth’, they mean the growth of real GDP. This measure has become so central to macroeconomics that few economists question its validity. Our intention here is to do just that. We argue that real GDP is a deeply flawed metric. It is presented as an objective measure of economic scale. But when we look under the surface, we find crippling subjectivity. Moreover, few economists seem to realize that real GDP is based on a non-existent quantum – utility. In light of these problems, it seems to us that much of macroeconomics needs to be rethought.
Keywords: aggregation; national accounting; economic growth; neoclassical economics; quality change; utility (search for similar items in EconPapers)
JEL-codes: C18 M4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe, nep-pke and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed
Downloads: (external link)
Journal Article: Real GDP: The Flawed Metric at the Heart of Macroeconomics (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:195950
Access Statistics for this paper
More papers in EconStor Preprints from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().