When I went to my Econ teacher and questioned GDP in front of him, saying it was just a random statistic that held no meaning in the free market, he said that GDP is unquestionable. Apparently, he feels that way about externalities, his definition of monopoly, and AS/AD.
Why do these econ teachers never question these false things about the economy?
Hey, at least he isn’t a positivist. Doesn’t sound like much of a fallibilist either, though.
Questioning it would mean they would have to question their worldview and admit to being wrong. It’s no different from why many theists refuse to question if there is a god or not.
I would love to know what people here at the forum have to say about the mainstream macroeconomics they teach you at school.
For example their obsession with GDP and other measurements. Why is measuring GDP problematic?
Maybe because people think that the statistic has value, and applications in economics, when the statistic is worthless.
This is directly from my blog, so if you’re interested you can read more there… but here’s the most crucial part of that post in as much as concerns the problems involved in calculating the GDP:
The fundamental meaning of the accounting concept of profitability, it seems, does not even enter into the equation. Certainly attention is paid to broad statistics such as the CPI, PPI and the GDP. However the fact that interest rates - one of the primary costs incurred by every entrepreneur in the economy - are not an accurate reflection of the real costs of borrowing both to companies and to the economy as a whole means that the ability of every entrepreneur and every borrower in the economy to gauge their profitability has been severely undermined, in real terms. Hence the ability of central banks to calculate the profitability of the economy as a whole and the relevance of statistics such as the GDP is also undermined (even if these statistics were accurate - which is rather doubtful considering the methods currently used to calculate both inflation and the GDP).
The full article is perhaps a little dry and deep for most folks, but you may be interested.