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How to Increase your Country’s GDP

Easily, Cheaply and Legitimately
World Economics
15 October 2019
                        

There are three ways to increase the real Gross Domestic Product (GDP) of any country. First, by producing more goods and services in a given time frame. This is not easy. Second, by fiddling the figures, a method often adopted by politicians of all kinds. As the economist John Kay illustrated in an article in the Financial Times titled: “Politicians will always succumb to the need to bend data“, and this in relation to the UK! There are many ways to do this, and it’s the easiest, cheapest and quickest method.

There are only two downsides. First you may be found out. Second, “bending “or otherwise fiddling GDP data may lead to the adoption of seriously erroneous policy decisions. It’s all too easy to believe your own lies...

A third method, and the one on which this paper will focus is to measure the output already produced more accurately. Usually but not universally this produces a significant increase in GDP, with many beneficial effects. This method is also relatively easy (no rocket science involved), and cheap (and can easily pay for itself in reduced debt servicing charges). Furthermore, unlike actually producing more goods and services, it doesn’t contribute to global warming...

A particularly spectacular illustration of the possibilities of producing better data was illustrated by Ghana in 2010 where an increase in GDP of about 60% was recorded, overnight! The World Bank stoutly maintained that the increase had been done using method 3 rather than 2…under its auspices.

Politicians spend much time debating ways to stimulate economic activity, but little attention is concentrated on policies to increase the resources and improve the methodologies devoted to measurement. On the contrary, National Statistics Offices are often banished to faraway places (like the fabled move of the UK’s Office of National Statistics (ONS) to a small town in Wales, causing 90% of its

 

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