For the two years that I have been writing this Blog, I have often used the term G.D.P.—or Gross Domestic Product. Although it is a measure of overall Economic Output; to some, it sounds like Economic Hokus Pokus. But, what does it mean…really?
I do not do book reviews, and I will leave that to you, the reader, to decide what you read and what you don’t. The concept of GDP is an important one to have some idea about; however, as the linked book review suggests. It is not precise and is constantly evolving. The link is as follows: http://www.nytimes.com/2014/04/06/business/an-economic-gauge-imperfect-but-vital.html?emc=edit_ae_20140405&nl=todaysheadlines&nlid=64667462&_r=0.
Every so often, articles are written about the largest companies in the U. S. Generally, they list the top ten corporations in the Dow Jones Industrial Average and, over the decades, the names keep changing. US Steel, a major component in years past, is no longer in the Dow. In fact, General Electric, which was formed by Thomas Alva Edison, is the only company that has been included since its inception, but, not continuously.
In the early days of America, we had an Agrarian Economy, mid-way through the Nineteenth Century it evolved into an Industrial one, then a Service Economy and, perhaps nowadays, it is an Internet Economy. Obviously, the scale of measurement will have to change. Think about it!
Generally, I would suggest that the GDP is the total output of Goods and Services produced by an Economy. Some might question, however, why Weapons of War and on-line gambling are included. And, how do you compute the value of the smartphone components that are sent to China and, once the finished product is assembled, the finished products are sent back to the US? Besides being an Internet Economy and a Service Economy, we now also have a Global Economy.
There’s no doubt that today’s concept of GDP will be sliced-and-diced, and reconfigured into something else. That is, until economic evolution will require it to happen again. As always, the times-are-a-changin’, and they will continue to do so.