> This metric is interesting in itself. When taken alongside the resources consumed by Japan and Mexico, or the population of Japan and Mexico, one can determine which country is using it's resources more efficiently and which population is more efficient at producing things of value.
Except you can't, reliably. If I mow my lawn and cook my dinner, and my neighbor does the same, it has no contribution to GDP. If I mow my neighbors lawn for $5 and mow mine as well, and my neighbor cooks my dinner for $5 and cooks his own as well, well, look, $10 of GDP.
GDP measured value of traded output, not total output, and so doesn't measure how effectively resources are used. You can make assumptions about the relations between the two values being constant, but that's probably not true across societies with different cultural patterns, or even in the same country over time given cultural change.
GDP is, for many purposes, apparently the best measure we have. But we shouldn't delude ourselves into thinking it tells us more than it does.
Except you can't, reliably. If I mow my lawn and cook my dinner, and my neighbor does the same, it has no contribution to GDP. If I mow my neighbors lawn for $5 and mow mine as well, and my neighbor cooks my dinner for $5 and cooks his own as well, well, look, $10 of GDP.
GDP measured value of traded output, not total output, and so doesn't measure how effectively resources are used. You can make assumptions about the relations between the two values being constant, but that's probably not true across societies with different cultural patterns, or even in the same country over time given cultural change.
GDP is, for many purposes, apparently the best measure we have. But we shouldn't delude ourselves into thinking it tells us more than it does.