Of course renting is an economic activity that should be reflected in the GDP, and it is as "real" as anything else. To focus solely on international trade feels shortsighted as well. When a doctor sees you and charges you $200, that's going into the GDP but not into any trade balance.

The world is richer since 2008 by almost any metric you can think of, including inflation-adjusted per capita income which is independent of GDP.

If my neighbour owns a house (outright) and lives in it, I pay nothing, and no impact on GDP

If I rent from my neighbour for $10k a year, and he rents from me for $10k a year, GDP increases by $20k a year, but nothing has really changed, expect the amount of money paid in taxes.

So that's why you have imputed rent as part of GDP. Fine, I get that.

How about this scenario

I have a kid and look after it, I pay nothing, and no impact on GDP

My neighbour has a kid and looks after it, he pays nothing, and no impact on GDP

I look after my neighbours kid 3 days a week and he looks after mine, in an exchange, no impact on GDP

I look after my neighbours kid 3 days a week and he pays me $300, and he looks after mine 3 days a week and I pay him $300. GDP increases $600 a week, and more money is taken in taxes.

Do we include all unpaid work?

If I (a painter) pay my neighbor (a gardener) to garden my front yard and he pays me to paint his garage, then GDP increases.

If I do the gardening myself, and he does the painting himself, GDP doesn't increase.

How about me looking after my old parent vs me working overtime and paying a care home to do it?

> How about me looking after my old parent vs me working overtime and paying a care home to do it?

Yes of course the latter will have an impact on the GDP, and the former not. You are producing more work for money and you are buying more work for money.

If someone is paid to dig holes and fill them up right after, the country is not any wealthier even though GDP is increased, in fact slightly less wealthy because of wear and tear on the shovel/excavator.

A company that pays contractors to do nothing but dig up holes and fill them back up again will quickly go bankrupt, so most people aren't going to engage in such enterprise.

Just because you found a way to hack the GDP in an online argument doesn't immediately throw its usefulness in the real-world.

e.g. repairing a water main, then laying some underground electrical cables, then laying some fiber optic wire.

Due to inefficient coordination, country A may have the same patch of ground dug up and filled three times.

Whereas country B, more efficient, only has to dig once, do all the work, then fill it up once.

So country B records lower GDP but in fact ends up slightly wealthier.

Shadow economies also exist and comprise different % in different countries.

I think the confusion here is because it seems odd that taking care of your parents by yourself is not considered productive unless you exchange money for it. GDP is an imperfect measure, and by definition does not take into account such voluntary/unpaid activities.

The caregiver is doing the same work either way. Where is the wealth increase coming from?

The OECD definition seems suspect, an increase in money reserves does not guarantee an increase in wealth when there's been inflation. Do you have a source for it?

I neglected to mention I work in an old peoples home. The overtime is the exact amount of care my parent needs.

In a more realistic examples, alcoholics purchasing booze, obese people overeating, and people wasting their lives watching TV all contribute to GDP.

Not really because even if you are living in your own paid-off house, the rent will be added to the GDP.

> If I do the gardening myself, and he does the painting himself, GDP doesn't increase.

There is a law being worked out somewhere (probably Europe) that will tax any activity you are doing. If you paint your garage, this activity will be evaluated financially and you'll have to pay taxes on it. Not doing so is tax evasion.

* last one was /s but maybe not really?

New feudalism

But capital increase. Next time this capital will hit market - when you decide to sell fruits or home with beautiful garden it will be taxed and will increase GDP.

GDP is statistics anyway, so any work that doesn't rot and hit the market will eventually show up in GDP.

This is not true, at least in the US. If you're a homeowner, they estimate how much it would cost to rent your own home and include that in the GDP.

https://en.wikipedia.org/wiki/Imputed_rent

> So that's why you have imputed rent as part of GDP. Fine, I get that.

I then came up with other parts where economic activity is not imputed

It could be backed by products that nobody wants (wars and such) or it could be at the expense of other quality of life metrics such that the juice is not worth the squeeze.

It's like lifting weights to get huge instead of to get strong.

How can a smart, presumably educated person not know that rent counts as economic activity?

To say the world is poorer than in 2008 is just utterly preposterous.

Per capita GPD in China went from 3500 to 12500. India 1000 to 2200.

There is half the world. US, Canada and Europe is only 15% of the population but I don't know how the case can be made we are poorer than in 2008 either.

https://www.propublica.org/article/yieldstar-rent-increase-r...

Of course it's "economic activity". But if I sublet to someone that sublets to someone that sublets to someone that lives in an apartment, that's a 4x increase in money flow but there's no production of goods or services at all.

It makes sense to have the cost of building and maintaining homes represented somewhere, but rent is a poor proxy for that.

Right, which is why the insult in the post I quoted is getting things very wrong.

> GDP only considers the value of the final consumed goods and services, and rent is a consumed service. If you're a homeowner, they estimate your rent and use that instead.

I understand that but it's a notably flawed way of going about it. Prices in general can have a loose coupling to value but with rent it's extra bad. A small change in housing stock can trigger a massive swing in rent and GDP even though the service being delivered doesn't change.

Watch this. Counting rent is about as sensible as counting financial services.

Gross World Product was about $43t in 2005 and $78t in 2014, so that would suggest international trade has increased from $10t to $18t in 10 years, nearly doubling, inflation adjusted.

You can say that the non-international part of GDP is overestimated, lets say by 40% more in 2014 than in 2005. That would mean that real GWP in 2014 was just 56t, and therefore the 18t international trade would actually be 32% -- a 33% increase in 10 years.

We're talking global control here so displacement is not that far fetched.

Also, related, check out Nate Hagens work on the Great simplification (he's got a podcast and on youtube). I won't spoil it here but he and his team of scientists have made some very interesting discoveries on future GDP growth.

People are consuming more international goods and more domestic goods, so trade as a percentage of trade has stagnated, but not volume. Since 2008, maritime trade has increased by 3 billion tons or 37% [1].

> Did you know that rent is part of GDP?

It's also a component of the inflation, so it cancels out. Housing is getting more expensive, but part of it is that we are consuming more of it than we used to. Home sizes have been growing, but household sizes have been falling [2].

[1] https://www.statista.com/statistics/264117/tonnage-of-worldw...

[2] https://www.thezebra.com/resources/home/median-home-size-in-...

I suspect sheer maritime freight tonnage may be a less reliable proxy due to factors like cost of shipping changes, role of air freight, tariff changes, etc. Maybe share all the trade and globalization graphs instead? https://ourworldindata.org/trade-and-globalization

Your second source, hilariously, predates the entire pandemic (which is when home prices really took off). It also says very little to support your point that we're "consuming more" housing because home sizes are growing. The Case-Shiller U.S. National Home Price NSA Index seems to suggest that home prices were rising only modestly until the pandemic. https://www.spglobal.com/spdji/en/indices/indicators/sp-core...

This doesn't seem to match what you'd get by multiplying their figures of inflation-adjusted GDP [1] with their figures of exports as a percentage of GDP [2].

> Case-Shiller U.S. National Home Price NSA

Home prices aren't factored into in either GDP or inflation because they're considered an asset. You're right that the economy has stagnated since the pandemic, especially in America. My point is that it's absurd to suggest that the global economy hasn't grown in the past decade.

[1] https://ourworldindata.org/grapher/world-gdp-over-the-last-t... [2] https://ourworldindata.org/grapher/merchandise-exports-gdp-c...

you raise concerns about the interpretation of GDP and use trade as a more believable replacement - but how about using manufacturing as a more direct replacement? it seems to have continued it's rising trend through the present. [2] rising by 50% in the last 10 years.

this seems to show that growth has not been flat, but has been rising in line with long-term trends.

[1] https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

[2] https://www.macrotrends.net/countries/WLD/world/manufacturin...