GDP Gross Domestic Product, or accounting ghost?

GDP or Gross Domestic Product

GDP Gross Domestic Product, or accounting ghost?

As an indicator of wealth, economy size and financial, industrial, economic strength, consumption pattern, development indicator, the GDP calculation process has flaws that can be misinterpreted in markets of differently structured countries, even leading to distortions for those who do not understand the methodology for capturing information on the equation for calculating GDP, because the formula for calculating GDP is limited to parameters that can repeat and multiply the number presented with GDP.

GDP = C + G + O + Q - M

C = PRIVATE CONSUMPTION

G = PUBLIC CONSUMPTION

O = INVESTMENT = GFCF + VEST

Q = EXPORT

M = IMPORT

GDP = C + G + GFCF + VEST + Q - M

GFCF = GROSS FIXED CAPITAL FORMATION

VEST = VARIATION IN STOCKS

When disclosing the results of the GDP, the IBGE also discloses the Gross Formation of Fixed Capital (GFCF), which is precisely the investment account of the GDP and measures how much companies have increased capital goods - those that serve to produce other goods, such as machinery, equipment and civil construction.

How is GDP calculated?

So we can only argue that a common problem about consumption can be easily demonstrated.

Suppose a family purchases a property for 300,000 units of monetary value.

Suppose this amount is financed by a real estate agent

Suppose expenses are made to legalize the property

Suppose the family has a wage income

See how these accounting operations affect the calculation of GDP

Suppose the family is unable to pay the value of the 2000 installment of the property

Suppose the property is repossessed by the court and returned to the bank that financed the property.

Suppose the repossessed property is auctioned

So we see all these operations creating virtual currency

300,000 value of the property acquired

400,000 amount financed with interest by the bank

15,000 notary expenses for purchase

2,000 registration expenses

2,000 expenses with brokerage and inspection and expertise operations

13,000 value of the monthly rent of the property buyer

15,000 legal expenses for default

200,000 value determined in the auction of the defaulting property

Total cash accounted for

947,000 the sum of all previous installments above

this value of 947,000 will appear in the sum of the GDP value

plus wages paid to homebuyers during the transaction

See that a property sale moved 947,000 in current values ​​in the economy that magically appears in the calculation of GDP in the fiscal year.

Roberto da Silva Rocha, professor universitário e cientista político