An alternative measure of economy

[Al6200]

I present, for Newground's benefit, a different way of measuring the size of a nations economy. I call it, "Harmonic GDP".

Basically, instead of just summing everyone's consumption and then adding on exports and investment, this system takes a person's total net income and capital gains minus their share of imports and plus their share of exports (denoted as P at k) and adds that to whatever amount of public money is spent on them, and then inverts that, and adds it to the sum of everyone else. Then that number is inverted, and multiplied by the number of people in a society.

The formula is shown below.

Some interesting implications:

1. The GDP drops very rapidly if only a few people are extremely poor. In fact if a person hypothetically consumed nothing from society and received no services from the government, the GDP would be 0.

2. There is a premium on having an equitable income distribution, so this might be a popular way of measuring the economy for liberals. I personally don't think it's very good though.

And for anyone who may be curious about where I've been for the past few weeks, I've been at college, studying Electrical Engineering. It's all good.

[MortifiedPenguins]

The problem would be though, is how do you denote someone thier share of an export?

For industries that provide a service, this would be easily solved, but do you fix it for blue collar workers?

[ThePretenders]

At 9/7/08 07:52 PM, MortifiedPenguins wrote: The problem would be though, is how do you denote someone thier share of an export?

For industries that provide a service, this would be easily solved, but do you fix it for blue collar workers?

By looking into a company's accounts to check for their exports and dividing it by the number of workers to denote their share. It might not be accurate but its the best way of denoting someone their share.

[n64kid]

At 9/7/08 06:34 PM, Al6200 wrote:

this system takes a person's total net income and capital gains minus their share of imports and plus their share of exports (denoted as P at k) and adds that to whatever amount of public money is spent on them

What? Are you saying companies or citizens? If I earn 50,000 from working and have capital gains of 10,000 from investments, then why would there be a need to adjust for net exports on individualized goverment spending on this sum?

For every police phone call one makes, the GDP for this individual goes up by 500 bucks? How is this any different than using the consumption approach, C+I+G+NX, and just replace C+I with Delta Net worth. Seems less complicated for the same thing, and it seems we can already determine Delta net worth easily already. I don't see a point in having your method.
below.

1. The GDP drops very rapidly if only a few people are extremely poor. In fact if a person hypothetically consumed nothing from society and received no services from the government, the GDP would be 0.

Only if the person is unemployed? I thought wages were considered in your method.

2. There is a premium on having an equitable income distribution, so this might be a popular way of measuring the economy for liberals. I personally don't think it's very good though.

How so, if the rich earn less and the poor earn more, wouldn't total wealth of the US go down because the people who extract wealth the best (from other nations), have less purchasing power?

And for anyone who may be curious about where I've been for the past few weeks, I've been at college, studying Electrical Engineering. It's all good.

I don't care, but I like your interest in economics. =)

[MortifiedPenguins]

At 9/8/08 01:02 PM, ThePretenders wrote:

At 9/7/08 07:52 PM, MortifiedPenguins wrote:

By looking into a company's accounts to check for their exports and dividing it by the number of workers to denote their share. It might not be accurate but its the best way of denoting someone their share.

But under our laws of property and our basic Capitalist system, they don't own any shares of this product, there simply assembling it.

Complete ownership would still fall to the firm that owns it, and if it is a public firm, the shareholders.

[ThePretenders]

At 9/8/08 03:23 PM, MortifiedPenguins wrote: But under our laws of property and our basic Capitalist system, they don't own any shares of this product, there simply assembling it.

Complete ownership would still fall to the firm that owns it, and if it is a public firm, the shareholders.

I think you have misunderstood me. I was talking about his harmonic GDP calculation concerning exports and I meant that the share of the exports denoted would be added to the formula. Well, I don't even how you supposed to denote a share of exports because you don't know which worker produced what export, so that his share exports will be added to him.

I think I'm rambling on. Time to sleep.