Sunday, August 17, 2003
You don't even know what to count
Forgive me for a pure economics post. I ran across this post by Yglesias about his selling flashlights for exorbitant prices during the blackout.
This idea that, somehow, the increased sales of flashlights, batteries, canned food, and bottled water could possibly make up for losing essentially the entire output of several large cities is, frankly, a bit bizarre. On the other hand, I did manage to sell two flashlights on the street Thursday night, one for $20 and one for $25 so my personal output was doing pretty well.Um, see the broken-window fallacy. Moreover, the P in GDP stands for Product. You didn't produce anything so there's no effect on GDP. Only if it induces rebuilding of Spam and MagLites will there be any effect on GDP. I agree with most people that this effect will be de minimus.
