NEW YORK TIMES: In “G.D.P.: A Brief but Affectionate History,” Diane Coyle, a British economist, conveys a sophisticated understanding of an economic standby, the quarterly measure of gross domestic product. A vital gauge of any nation’s prosperity, the G.D.P. has its strengths and its limitations, which are well explained in Dr. Coyle’s rich and engaging little book…
A major omission is the work we do for ourselves: cooking, cleaning, painting a room, taking care of children or an aging relative. Pay a gardener to mow your lawn, and that’s part of the G.D.P.; do it yourself, and it’s not. If all such tasks were included, and priced at the going wage, their contribution to the G.D.P. would be tremendous.
Nor does G.D.P. count the underground economy, conducted out of sight of regulators and tax collectors, even though this unofficial sector provides many jobs and is often highly entrepreneurial. Estimates are that in some countries the “informal” economy amounts to a quarter of total output, and considerably more in the third world. (In the United States, the estimate is 7 percent.)… (more)
