wealth distribution

Planet Money Summer School 2: GDP & What Counts : Planet Money

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Illustration by James Yang
Illustration by James Yang

Find all episodes of Planet Money Summer School here.

What even is “the economy”? Not too long ago, “the economy,” as a thing in itself, wasn’t really a common idea that people talked about.

What changed that was an effort to measure every economic thing America made or did and sum it all up, an effort to create what has become known as Gross Domestic Product, or GDP.

Last week on Summer School we heard about the government’s tools to stabilize the economy. But to do that, you need to know what you are stabilizing. How do we even know if the economy is doing well or not?

Our path out of the economic darkness and into the light has been guided in large part by that single statistic: GDP. With the help of GDP, assessments of the economy transformed almost overnight from vague and anecdotal, to relatively precise and consistent. GDP tells us how much the economy grew or shrank, governments look to it when crafting economic policy, investors watch it to decide where to route flows of money. It is the closest thing we have to a report card on how we’re all doing in this big ecosystem we call, the economy.

This week: the origins, history, and problems with the economic indicator to rule them all, including what is left out.

For more detail on new methods to incorporate inequality into GDP, see our latest newsletter.

We cover:

  • Gross Domestic Product 
  • National Income 
  • Intermediate vs finished goods
  • What is left out of GDP

Assignment:

Think like an economist while you’re buying things this week. Ask yourself whether what you’re buying is a good or a service. Think about all the intermediate goods that went into the final product. Did you consume more goods or services this week? What were some of the most common intermediate goods? Let us know using #PMSummerSchool.

Econ songs of summer: Every week, we’ll pick a few of our favorites and add them to our playlist. Recommend your favorite on social media. Make sure to use #PMSummerschool.

At Planet Money Summer School, phones ARE allowed during class. Check out this week’s PM Tik Tok!

Music: El Flamingo, Surf the Surf, Werner’s Tangent, and Don’t Look Down.

Find us: Twitter / Facebook / Instagram / TikTok

Subscribe to our show on Apple Podcasts, Pocket Casts and NPR One.

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