"GDP is more of a measure of economic activity than value". I think this a very good intuition.
As I understand it, a main source of confusion in discussions like this stems from mixing up the notion of "value" as (A) price*quantity=revenue and (B) the difference between the consumer's willingness to pay and the price.
"A" is what counts towards GDP -- mostly for practical reasons, since prices and quantities are, at least theoretically, are straightforward to measure on a national level. However, this definition goes against the intuition of lots of people,... (read more)
"GDP is more of a measure of economic activity than value". I think this a very good intuition.
As I understand it, a main source of confusion in discussions like this stems from mixing up the notion of "value" as (A) price*quantity=revenue and (B) the difference between the consumer's willingness to pay and the price.
"A" is what counts towards GDP -- mostly for practical reasons, since prices and quantities are, at least theoretically, are straightforward to measure on a national level. However, this definition goes against the intuition of lots of people,... (read more)