I presume that whoever owns the infrastructure will be able to report the losses and so reduce the GDP calculations. Damage to homes will probably also play a part in the calculations as their values are tracked by banks and the government. For smaller personal assets, I don’t think the value would be tracked. Also, the 200B damages counting towards GDP could have been spent elsewhere, so the storm wouldn’t really increase GDP. It would also reduce personal incomes of city dwellers.
As much as we like to shit on bourgeois economists, I think even they at least know better than to pull a broken window fallacy with GDP calculations, since that is something you are taught even in econ 101.
The real thing that (nominal) GDP measures is purchasing power of countries relative to other countries on the international markets at current prices (assuming frictionless trade). I do think it is a useful number to denote a few things, like, 1. is the country in a recession, 2. where does this country stand wrt imperialism, 3. how developed the country is.
infrastructure is considered a ‘stock’ you measure it at any point in time.
GDP is a ‘flow’, total value of final goods and services measured over a year. so if a country has a bridge worth $100b, that won’t be included in GDP since it already exists, it won’t be shown when its destroyed/depreciates either. it is only measured for the year its built, no other year.
so if a storm hits, people lose jobs, homes, reduce consumption, GDP falls. to counter some of the effects, the Government injects money through jobs programs, stimulus checks, ppp loans etc which prevents some of the fall.
GDP is a ‘flow’, total value of final goods and services measured over a year. so if a country has a bridge worth $100b, that won’t be included in GDP since it already exists, it won’t be shown when its destroyed/depreciates either. it is only measured for the year its built, no other year.
Yeah, I don’t know why I said that the destruction of the bridge would be counted. For GDP metrics, the product/service is assumed to have been consumed entirely in the year it was sold.
I presume that whoever owns the infrastructure will be able to report the losses and so reduce the GDP calculations. Damage to homes will probably also play a part in the calculations as their values are tracked by banks and the government. For smaller personal assets, I don’t think the value would be tracked. Also, the 200B damages counting towards GDP could have been spent elsewhere, so the storm wouldn’t really increase GDP. It would also reduce personal incomes of city dwellers.
As much as we like to shit on bourgeois economists, I think even they at least know better than to pull a broken window fallacy with GDP calculations, since that is something you are taught even in econ 101.
The real thing that (nominal) GDP measures is purchasing power of countries relative to other countries on the international markets at current prices (assuming frictionless trade). I do think it is a useful number to denote a few things, like, 1. is the country in a recession, 2. where does this country stand wrt imperialism, 3. how developed the country is.
infrastructure is considered a ‘stock’ you measure it at any point in time.
GDP is a ‘flow’, total value of final goods and services measured over a year. so if a country has a bridge worth $100b, that won’t be included in GDP since it already exists, it won’t be shown when its destroyed/depreciates either. it is only measured for the year its built, no other year.
so if a storm hits, people lose jobs, homes, reduce consumption, GDP falls. to counter some of the effects, the Government injects money through jobs programs, stimulus checks, ppp loans etc which prevents some of the fall.
Yeah, I don’t know why I said that the destruction of the bridge would be counted. For GDP metrics, the product/service is assumed to have been consumed entirely in the year it was sold.