Ecommerce has additional fees like delivery, refunds given as store credit, etc. That raises gdp and revenue without actually reflecting increased output. Also any apps or software bought with the product will be recorded as real gdp even if nothing actually happens except a download.
I think retial sales, industrial production and other gdp related indicators are inflated right now by st least 10% due to these factors. Car sales, home sales, physical values have gone down by much more than gdp for this reason. The recession in gdp may correct but the physical indicators are not improving.
As @Ruken points out so do the figures from the bricks&mortar economy.
Increased delivery charges represent increased revenue in the transport sector and increased aggregate demand.
All these “add on service charges” as you would describe them add way more than 10% to the final delivered value of goods and services.
Its actually not aggregate demand the way it is done. Its delivery services aka random people using their cars different therefore temporarily inflating gdp
It’s the difference between making a widget and paying someone to make it. Same thing but one is GDP.
There’s nothing artificial about a delivery charge. I am paying for service. I earn money for that by performing services. But if you’re concerned that GDP is an imperfect measure of economic wellbeing, I don’t think anyone is going to argue with you.
The makeup of an economy is constantly changing. The statistics are what they are and include what they include. Until the basket is revised … again.
What do you think has changed over what timeframe enough to make what volume of impact?
Guess what: Every security guard in existence is part of GDP. And they produce exactly zero. If only we didn’t have to contend with crooks they wouldn’t exist. Private security is a growth industry and has been for decades. What do you intend to do about that when adjusting the GDP statistics to your liking?
I will grant that some factors have changed more quickly in the last 6 months than they would have absent COVID. And probably most of those changes are unhelpful.
But which and how much? If you can’t identify specifics and quantify them, and do the same for any offsetting factors, you’re just arm-waving that “An x% reduction feels about right to satisfy my prejudices.”
GDP does not really measure anything sensible, the problem is that it is hard to come up with something better. Bhutan is trying something they call Gross National Happiness, but that is far from perfect.
To see how flawed GDP is, picture this: you have an accident driving your car, you get injured, the car has to be replaced. The car has to be towed away, scrapped, you buy a new one, you are taken to hospital, treated, the police records the accident, your insurance company denies payment because you were drunk (and many more things besides, you get the idea): that all adds to GDP. But your new car is worse than the old one and you do not even recover fully and live in pain the rest of your life. Everything is worse than before, but you have increased GDP. I think GDP should not be treated too seriously. It has some uses, mainly statistical, but you have to be aware of its inherent limits. And when situations change radically, like now, the comparability is problematic.
Ah, but the strawberries, that’s, that’s where I had them, they laughed at me and made jokes, but I proved beyond the shadow of a doubt, with geometric logic, that a duplicate key to the ward room icebox did exist, and I’ve had produced that key if they hadn’t pulled the Caine out of action.
Peak oil? Oh, that’s precious. I haven’t heard anybody use peak oil in an argument for years. Summons wonderful feelings of nostalgia. It’s like hearing someone use commie simp in an argument.
Naw, he’s right…we may have hit peak oil. Of course, the fact that this is because fewer people are buying or using oil today and there is a huge glut of the stuff on the market is probably not what he meant by that, but you can’t have everything.
Seriously man, this is so last decade. Had the Russian’s and Saudi not come to an agreement to ramp down production it’s possible the entire oil industry might have collapsed in the wash of extraneous oil glutting the market. You do recall that oil futures actually fell to negative price points because THERE WAS NO MORE STORAGE AVAILABLE FOR OIL BEING PRODUCED, yes?
At any rate, based on past discussions with Peak Oil™ types, it’s futile to continue this discussion. My own drive by post above was more in the form of a joke, tongue in cheek than me wanting to wade into this morass of a thread, especially as it heads into peak oil territory. Next thing it will be wanting to discuss global cooling and the coming ice age…
Actually, storage is irrelevant, if there was a true problem then oil would sit in the pipeline. Minor fluctuations in storage capacity are irrelevant.
The reason oil prices went down is the Uinta Basin railway is starting construction to bring kerogen to refineries. Therefore expanding oil reserves by trillions of barrels. Oil prices are determined by reserves, not inventories, which are irrelevant and transitory.
Just saying ‘then the oil would sit in the pipeline’ shows you don’t really understand how even the basics work, let alone ‘Oil prices are determined by reserves’. At any rate, please feel free to continue.
