# Gross National Product

**URL:** <https://boards.straightdope.com/t/gross-national-product/5737>\
**Category:** Factual Questions\
**Created:** [December 31, 1999, 2:20pm UTC](https://boards.straightdope.com/t/gross-national-product/5737 "1999-12-31T14:20:00Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![galen](https://avatars.discourse-cdn.com/v4/letter/g/ecc23a/32.png) [@galen](https://boards.straightdope.com/u/galen)\
**Post date:** [December 31, 1999, 2:20pm UTC](https://boards.straightdope.com/t/gross-national-product/5737/1 "1999-12-31T14:20:00Z")

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If my car is damaged in an accident, does the cost to repair it get entered on the positive side of the leger named Gross National Product?

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The philosophers have only interpreted the world in various ways; the point, however, is to change it. (Karl Marx, 1845)

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**Author:** ![aviddiva](https://avatars.discourse-cdn.com/v4/letter/a/a88e57/32.png) [@aviddiva](https://boards.straightdope.com/u/aviddiva)\
**Post date:** [December 31, 1999, 7:14pm UTC](https://boards.straightdope.com/t/gross-national-product/5737/2 "1999-12-31T19:14:00Z")

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All legitimate movement of capital within a nation’s boundaries (plus [exports minus imports]) are included in GDP (Gross Domestic Product–what GNP was changed to (in the '80s? early '90s?), in Canada anyway).

So yes, even money spent repairing damage or redeeming error is included. For instance, the year of the massive Exxon Valdez oil spill was a great one for the economy, as billions of dollars were spent (by both the U.S. and Canada) cleaning it up. A natural disaster of unprecedented proportions added massively to the GDPs of both countries. Hallelujah.

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**Author:** ![aviddiva](https://avatars.discourse-cdn.com/v4/letter/a/a88e57/32.png) [@aviddiva](https://boards.straightdope.com/u/aviddiva)\
**Post date:** [December 31, 1999, 7:20pm UTC](https://boards.straightdope.com/t/gross-national-product/5737/3 "1999-12-31T19:20:00Z")

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…that is, an _environmental disaster_, not a “natural disaster.” Sheesh.

\<note to self: read it over at least once, o.k.?\>

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**Author:** ![cards](https://avatars.discourse-cdn.com/v4/letter/c/ecd19e/32.png) [@cards](https://boards.straightdope.com/u/cards)\
**Post date:** [December 31, 1999, 11:30pm UTC](https://boards.straightdope.com/t/gross-national-product/5737/4 "1999-12-31T23:30:00Z")

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Yes, the repair has a positive effect on GDP (which the US has been using since 1990 for forecasting and measurement) arising from the money spent on the repairs at the garage. However, there would also be a negative impact on GDP coming from the loss of your productivity caused by the hassel of getting your car fixed (dealing with the insurance company, time off for potential court appearances and the like). So what is the net outcome, economic gain or loss? Depends on how much the car repair generates versus how much the economy loses in productivity. This is a simplistic analysis, because there are transaction costs to consider, posible income and substitution effects, blah, blah, blah.

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**Author:** ![TomH](https://avatars.discourse-cdn.com/v4/letter/t/90db22/32.png) [@TomH](https://boards.straightdope.com/u/TomH)\
**Post date:** [January 3, 2000, 12:50am UTC](https://boards.straightdope.com/t/gross-national-product/5737/5 "2000-01-03T00:50:00Z")

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That’s why it’s gross and not net. It measures the value added by the repair but not the value lost in the collision.