Greece has recently taken an interesting approach to calculating its GDP, in order to avoid sanctions from the European Union.
Saturday, November 18, 2006
Measuring the GDP in Greece
Greece has recently taken an interesting approach to calculating its GDP, in order to avoid sanctions from the European Union.
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4 comments:
wow talk about a double edged sword. the last paragraph saying how greece will lose structural funds and have to pay more into the EU basically backfired their entire plan is if the amount they have to pay is greater then the fine. and well prostition is a service after all. but i find it hard to belive a government couldo actually count how many things against the law are going on that they 'dont know about'. and still be able ot add that into GDP. lets compare that to america if we counted all illegal drug sales and all the services done by illegal immigrants our GPA would skyrocket. but i think the real question is how do you count things you 'dont know' are happening and how ethical the people in charge really are for counting it.
So the GDP equation should now read: C + I + G + (X-IM)+ BLACK MARKET? Greece never stops being the source of creativity... The labor productivity value must be really high in the "round the clock" duties of the "hetairai" if their activities lower the budget deficit so much. And how do they count the black market in the GDP? Do prostitues now register themselves as employed in Greece?
This article goes to show that statistics can be manipulated and calculated in ways that change the final result without outright distortion of information. Therefore, we must understand that numbers can be as subjective as words, especially in statistics.
The bad thing for Greece now is that in addition to showing an increase in GDP when there may actually be none, they will have to pay more into the EU budget, if they are taken seriously.
who would of thought that a country would be proud of the number of prostitutes living in it. If Greece includes Black market activity in their GDP, wouldnt it mess up the whole system, while they are including un recorded deals in their GDP numbers could get mixed up and screw up the whole system. Also if Greece starts including such activities in their GDP dont other countries have to do the same thing?
I think the fact that Mr. Charles Grant, the director of the Centre for European Reform, stated that "there was a real transformation in the mid-1990s. They cleared up corruption and spent EU funds wisely..." is a positive push for the new Greek GDP. Even though the revised GDP includes illegal activities such as money laundering, prostitution, and drink smuggling, it was able to lower the deficit from 2.1% to 1.9%. Athens has also announced that the economy is 25% bigger, I'd say that this is a significant improvement, and although the aspects of it are a little shady, it is greatly helping the economy.
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