Comments on: Thinking About the Stimulus: GDP https://windypundit.com/2009/02/thinking_about_the_stimulus_re/ Classical liberalism, criminal laws, the war on drugs, economics, free speech, technology, photography, sex work, cats, and whatever else comes to mind. Mon, 16 Feb 2009 16:42:50 +0000 hourly 1 https://wordpress.org/?v=7.1.4 By: Mark Draughn https://windypundit.com/2009/02/thinking_about_the_stimulus_re/#comment-1536 Mon, 16 Feb 2009 16:42:50 +0000 https://windypundit.com/?p=1515#comment-1536 You’re right, of course. I oversimplified. I’ve changed the paragraph to expand on this.

Thanks for the correction. I think I do okay writing about microeconomics, but this is my first attempt at macro.

I’m trying to tell, as best I can, the story of a Keynesian demand-driven Krugman-and-the-babysitting-co-op recession, and how that implies the need for a stimulus. Investment, ordinary government spending, and net exports really don’t have a place in that story.

]]> By: KipEsquire https://windypundit.com/2009/02/thinking_about_the_stimulus_re/#comment-1535 Mon, 16 Feb 2009 16:21:14 +0000 https://windypundit.com/?p=1515#comment-1535 The U.S. Gross Domestic Product (GDP) is, roughly speaking, the value of everything produced for consumption in the United States in one year…”

No, GDP is everything produced by the economy, period. It includes not just consumption, but investment, government output and net exports:

Y = C + I + G + (X-M)

A major problem with the Bush administration was precisely that it defined “economic health” exclusively in terms of maintaining “consumption” — with little or no concern for who was consuming what, where the consumption came from, or how it was paid for.

Now, by contrast, we have an administration that defines “economic health” exclusively in terms of maintaining “jobs” — with little or no concern for who was employing whom, where the jobs come from, or how they will be paid for.

“Change we can believe in”?

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