nancylebov (nancylebov) wrote,

GNP as blur and fog

Does GNP measure growth and welfare? by Oskar Morgenstern:
The principal calculations to which GNP figures are subjected are rates of change, presumably rates of growth, because that is with what the world has been made aware. Governments everywhere look hypnotized at these calculations and are judged by the number generated even for the short intervals of a quarter year -- incidentally so brief a period that one must be astonished that (even given modern means of communications) all the hundreds of thousands of underlying figures could be collected: all this without any error whatsoever! Or, if -- heaven forbid -- there are errors that the very kindly distribute themselves in such manner that they all cancel out?

Two quotes from the essay:

St. Augustine: "For so it is, oh my Lord God, I measure it, but what it is I measure, I do not know".

Gauss: "The lack of mathematical insight shows up in nothing so surprisingly as in unbounded precision in numerical computations."

Does anyone have a context for the Augustine quote?

I don't think things are much better for the GDP. The record keeping is probably improved (but is the illegal economy larger?), but the theoretical problems haven't changed.

Link thanks to Vladimir M.

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