Praying for Growth at the GDP Altar

The Perils of Confusing GDP Growth Figures with the Real Economy

CEI’s 2012-2013 Warren Brookes journalism fellow, Matthew Melchiorre, critiques a report by economists that claims fiscal stimulus in 1930s America accounted for faster recovery relative to Greece today. “When economists treat GDP as the be-all end-all metric to evaluate economic performance, they often propose ways to improve GDP figures, rather than the actual economy. Although GDP may be the best of limited measures in assessing total economic output, it is only a proxy, and proxies are imperfect.”