Policymakers Would Be Wise to Use New Economic Indicators
Washington policymakers recently gained access to new tools to aid them in measuring U.S. economic growth that they would be well advised to use.
Possibly the biggest change is that the Bureau of Economic Analysis (BEA) last month began the quarterly release of Gross Output (GO), an economic measure to track total output that should serve as a compliment to the traditional Gross Domestic Product (GDP) that focuses on final output. The key advantage of the GO measure is that it provides a better reflection of the overall state of the economy, including business spending, than GDP offers by itself.
As a measure of total production, GO was valued at more than $30 trillion at the end of 2013 to nearly double the size of GDP. A longtime champion of using GO is Mark Skousen, PhD, a free-market economist who first advocated the expanded use of the statistic in his 1990 book, “The Structure of Production,” which he described as an underground bible for supply-side economics and Austrian macroeconomics.
Read more about why key decision makers would be wise to utilize the Bureau of Economic Analysis’ recently introduced Gross Output statistic at Eagle Daily Investor.