This has been my personal gripe for a long time now! Imagine that I needed to borrow £1000 from my mum, she lends me that money, and then I return that much back to her shortly after; therefore generating £2000 in GDP. It excludes the reason why I needed to borrow that money, ie it could be that I am in dire economic situation, and could not pay for essentials, therefore this GDP growth is due to poverty rather than growth!
Additionally, in the US, there is a thing called "imputed GDP", which is essentially GDP that is not realised due to an owned property being lived in and not being rented out. This generally accounts for around 15% of US's GDP https://www.bea.gov/help/faq/488 I guess companies such as Black Rock seem to be doing good for the GDP by buying people's properties and then renting it back to them.
tl;dr I am also not a fan of purely looking at GDP as an accurate metric for the economy.
This has been my personal gripe for a long time now! Imagine that I needed to borrow £1000 from my mum, she lends me that money, and then I return that much back to her shortly after; therefore generating £2000 in GDP. It excludes the reason why I needed to borrow that money, ie it could be that I am in dire economic situation, and could not pay for essentials, therefore this GDP growth is due to poverty rather than growth!
Additionally, in the US, there is a thing called "imputed GDP", which is essentially GDP that is not realised due to an owned property being lived in and not being rented out. This generally accounts for around 15% of US's GDP https://www.bea.gov/help/faq/488 I guess companies such as Black Rock seem to be doing good for the GDP by buying people's properties and then renting it back to them.
tl;dr I am also not a fan of purely looking at GDP as an accurate metric for the economy.