Gerhard wrote:
> Besides, the GNP is (IMO) a useless figure. IMO it has no meaning for any
> meaningful purpose. If -- hypothetically -- in one year road accidents 
> rise
> sharply and people are forced to shell out all kinds of savings (or 
> better,
> take up credits to shell out, given the current savings rate) to fix their
> cars, buy new cars, pay their hospital bills, you'll see a rise in the 
> GNP.
> Meaning... what exactly? That the economy boomed? Yeah, right...

Gerhad, sorry, but what you said above is absolute nonsense.

GDP (I'm pretty sure when you say "GNP", you mean "GDP") is in fact a very 
useful number. In simple terms, it measures the economic output of a 
country -- which in turn determines its effect on the global economy. GDP 
per capita is a good indicator of the wealth of an average citizen of the 
country. The CIA World Factbook is a great place to look up this 
information, and see how the GDP corellates with what you know about a 
country -- for example, everybody knows that US is a very rich country, and 
Afghanistan is a very poor one:

https://www.cia.gov/cia/publications/factbook/

As far as your example goes, the hypothetical sharp increase in auto 
accidents will NOT cause a rise in GDP (or GNP). If would cause people to 
spend the money on the things you listed (fixing cars, hospital bills, etc) 
instead of spending it on something else -- houses, vacations, big screen 
TVs. $1000 spent on hospital bills versus a TV has no effect on GDP. If 
anything, the accidents would cause the GDP to be lower because of the loss 
of productivity.

Vitaliy

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