"GDP fetish"—the belief that increases in GDP are good whether or not they represent increased production of things that people actually value. If the government spends $100 billion digging holes and then filling them back up, then GDP can rise by $100 billion or more even if the $100 billion is totally wasted.
Monday, January 21, 2013
Quote of the Day: GDP Fetish
This is from Professor, Econlog blogger, and research fellow at Stanford University’s Hoover Institution David R. Henderson in a book review of former Federal Reserve of vice chairman Alan Binder’s “After the Music Stopped” at the Wall Street Journal (hat tip Mises Blog).
The fetish for GDP is really a statistical illusion