Hacker News Reader

Comment by projektfu | Hacker News Reader

It’s not zero sum, even during recession, because each year the economy is still adding its GDP even if it is not growing. You don’t have to take someone else’s, but you might all take less than the potential.

View on HN

> because each year the economy is still adding its GDP even if it is not growing

Er .. "economic growth" and "increasing GDP" are usually considered to be synonyms? Do you have alternative definitions?

I believe they may be referring to the idea that not everything is consumed in the year it’s produced. Infrastructure, for example, is useful years or even decades after it is built (and, presumably, counted in GDP).

To make it concrete, if there are two people in the economy: Alice and Bob. The only products that are exchanged is clothes and shoes. Every year, Alice sells 100 Galleons of shoes to Bob and Bob sells 100 Galleons of clothes to Alice. So the GDP of their economy is 200 Galleons. But assuming that shoes and clothes don't decay in one year, Alice and Bob will become wealthier and wealthier in apparel every year.

They will still earn the same number of Galleons each year though, so GDP stays the same.

Perhaps surprisingly, neither capital stock nor asset price inflation is counted.

If your GDP is $100 billion and your growth rate is 0%, you're still adding $100 billion to the economy every year (assuming that not all wealth is not consumed within the same year).

If your GDP is $100 billion and your growth rate is 0%, then next year your GDP will be $100 billion. This is normally considered to be "economy is the same size", not "added to the economy".

GDP is nothing to do with wealth and entirely to do with income.

Do you know if your assumption is true? GDP ignores depreciation/destruction.

Reply on news.ycombinator.com