Comment by gabruoy
2 days ago
GDP is just more people spending more money for more expensive things. It's kind of a failed metric for economic productivity unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
2 days ago
GDP is just more people spending more money for more expensive things. It's kind of a failed metric for economic productivity unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
> GDP is just more people spending more money for more expensive things. It's kind of a failed metric for economic productivity
It's a good metric for a tax base.
> unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac
Which is why we consider both nominal and real GDP. (In your example, the former represents 2x nominal GDP. They're equivalent in terms of real GDP.)
> unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
It literally straightforwardly is. It provides the same number of calories, to a worker who is twice as productive in the $8-per-big-Mac city as the $4-per-Big-Mac city. Differences in per-capita productivity between supercities and hinterlands are vast.