Re:U.S. economy shrank at a 1.4% annual rate in the first qu...
by dragonwriter on Thursday April 28, 2022 @11:57AM
(#31194143)
> If suddenly, everyone between the ages of 0 and 5 vanished, it would have a huge effect on the population, but at first take, zero effect on the GDP since presumably that age group is not involved in production.
That age group is involved in production (e.g., in media.)
But not lot, so, yes, the narrow first-order GDP effect would be very small.
> With a second approximation, you might say that GDP would increase since parental childcare is not part of the GDP and those parents could instead be adding to the GDP.
I suspect second order demand side effects would probably be more strongly negative that second order supply side effects would be positive. You can't predict GDP effects from labor supply side effects alone.
That age group is involved in production (e.g., in media.)
But not lot, so, yes, the narrow first-order GDP effect would be very small.
> With a second approximation, you might say that GDP would increase since parental childcare is not part of the GDP and those parents could instead be adding to the GDP.
I suspect second order demand side effects would probably be more strongly negative that second order supply side effects would be positive. You can't predict GDP effects from labor supply side effects alone.