GDP

Undoubtedly the most well-known and widely used indicator of macroeconomic performance is gross domestic product. Like many other historical events, it is difficult to determine who and when began measuring national income. Interest in accounting at the national level emerged in the nineteenth century and, more specifically, the rapid economic growth during …

Author: Steven Horwitz, FEE.org Even the smartest economists can make the simplest mistake. Two contemporary books – “Violence and Social Order” by Douglas North, Barry Weigast, and John Joseph Wallis (not to be confused with John Wallis, a 17th-century mathematician) and “Why Nations Fail” by Daron Acemoglu and …

In 2013, we witnessed various (more or less) creative ways to manipulate GDP. From the US, to Greece and the UK, to Nigeria[1], the index fell victim to politicians’ desire not to pay the price for the economic crises, harmful policies and cronyism they create. Starting this year, the NSI also …

Why are things not working out in the energy sector? Politicians have all the leverage to control the industry, but in practice they systematically make the wrong decisions. The usual excuse is a lack of sufficient control over the sector. The political decision-making process has inherent defects that stand out when compared to the free market, which by its very nature …

Is gross domestic product a good indicator of the size of the economy? Does it measure growth? What are its shortcomings?