00:01
So gdp, just as a definition, involves basically three parts.
00:05
The market value of all final goods and services, final goods and services produced domestically.
00:19
So to count as gdp, it's got to be three things.
00:23
One, it's got to have a market value.
00:25
Stuff that is not traded in markets or has no market value.
00:30
Is not part of gdp because we can only observe market transactions, right? there's no way the government can observe non -market transactions.
00:39
So if we're measuring the economy, we can only measure what we observe.
00:43
We only count final goods and services because intermediate goods and services don't represent value created, right? if i sell you flour and you sell me black flour, no value has been created.
00:58
If we counted those intermediate transactions until the flower was turned into bread, we would be overestimating the value of production.
01:05
And we are only considering what's going into our, what's actually produced in our country, right? that's the whole point of gdp.
01:13
So we've got a whole bunch of things.
01:17
We have the value of exports, right? that's what goods produced domestically and sold abroad are exports, right? you may have seen y is equal to c plus i plus g plus x minus m exports are market goods they are final goods and they are produced domestically absolutely 100%.
01:37
Value of intermediate goods.
01:39
So almost by definition intermediate goods, oh this is true...