January 11, 2011, 10:10 am
The point here isn't that GDP is the sole goal of human existence; it is,
rather, that even GDP is a much less mechanical number than many people
imagine, that it's quite possible for measured real GDP to rise even if the
physical volume of production doesn't change much. Alan Greenspan used to
give talks about how the GDP was getting lighter [...] he had a point.
You can see some of this effect in world trade, The volume of world shipping
has, of course, risen a lot over the past 40 years - almost 250 percent
[...] But the "volume" of trade as measured by the WTO - which is
constructed with the same kind of constant-price methodology we use for
GDP - has risen more than twice as much (pdf). What we're seeing here is a
shift toward more electronics and other high-value-to-weight goods; but the
point is that real GDP isn't necessarily about tons or BTUs, and it can keep
rising, even the way we currently do the accounting, in a world of limited
natural resources.
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