Tuesday, July 22, 2014

Suppose a woman marries her butler. After theyare married, her husband continues to wait onher as before, and she continues to support himas before...

In the situation that you describe here, Gross Domestic Product (GDP) would go down a little bit.  It probably should not go down, because the same amount of work is being done after the marriage as before, but it will go down nonetheless.


GDP is a measure of the market value of all goods and services produced in a country during a given year.  One aspect of GDP, then, is that it only measures goods...

In the situation that you describe here, Gross Domestic Product (GDP) would go down a little bit.  It probably should not go down, because the same amount of work is being done after the marriage as before, but it will go down nonetheless.


GDP is a measure of the market value of all goods and services produced in a country during a given year.  One aspect of GDP, then, is that it only measures goods and services that have a market value.  This, by definition, does not include goods and services that are not sold to anyone.  Because GDP does not count services that are not sold, GDP will go down after this marriage.  The woman will no longer be paying the man money for his services as a butler, even though he is doing the same work that he did before they married.  Therefore, GDP will fall by the amount that he was getting paid.


You can argue that GDP should not go down in this case.  GDP is supposed to measure everything that an economy produces in a given year.  The amount of services being produced did not change, so GDP should not have changed.  However, economists have defined GDP in this way because it would be very hard to measure the value of all unpaid work going on in an economy.  Because GDP is defined in this way, this marriage will cause GDP to drop even if, arguably, it should not.

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