I figure that since people are looking to GDP to measure growth, that we Austrians should focus more on our own equivalent economic growth indicator: PPR. I can't find figures for this, though. People can look to GDP and say that at least we're growing, but I have this feeling that looking at PPR would show that the economy is shrinking, especially when looking at PPR per capita. So is there a place where I can find recent numbers for PPR? Or how can I figure it out for myself?
Yes, I am a huge Dodgers fan.
Anti-state since I learned about the Cuban Revolution and why my dad had to flee the country.
Beer, Guns and Baseball My blog
The Anarch is to the Anarchist what the Monarch is to the Monarchist.
This is the first time I've heard of PPR. I can't say I'm very impressed by this concept. Maybe the idea has died out due to being problematic? Here are the problems I see.
First, if an economy produces a lot one year, but people consume even more, I would expect the economy would have shrunk. But PPR wouldn't show this, perhaps not until a following time period when production will have deteriorated. This points to an error in the PPR concept. Instead of focusing on income, I would think the economy's "size" would be the accumulated capital, and the "growth" would be the derivative of its logarithm - i.e. nothing to do with income, and having units of inverse time. Am I wrong here? Does a group of Amish people who have a gigantic hoard of gold have a small economy or a large economy?
Second, the idea of PPR conflicts with von Mises's Human Action: "But it is nonsensical to reckon national income or national wealth. As soon as we embark upon considerations foreign to the reasoning of a man operating within the pale of a market society, we are no longer helped by monetary calculation methods.". I guess PPR is not economics but rather econometrics. As von Mises explains, you ought to take into account a country's climate and people's knowledge and talents in these calculations. Good luck.
Third, governments get their money not so much from taxes but often, and especially in US's case, they get money from inflation (printing money) i.e. central bank bond financing. Neglecting this is surely a serious error.
>People can look to GDP and say that at least we're growing
Allegedly governments produce a lot of phony statistics. Shadowstats.com computes its own value for US's GDP which shows negative changes for many years.
>the economy is shrinking, especially when looking at PPR per capita
"per capita" measures dropping may mean that life stinks, but what does that have to do with the overall size or growth of the economy? For example, per capita land keeps dropping yet the total amount of land remains constant.