International Program in Economics and Management

GDP, as a volume output measure, does not tell whether house prices are too high as compared to incomes. It also does not tell how homes are financed and what risks such financing methods represent. It does not tell whether incomes keep pace with inflation levels. It also does not tell whether the production capacity is too high for the demand levels -an output gap- or that demand levels are too low -an income gap. It does not show the labour force participation rate, when sometimes job seekers are so disappointed in finding jobs that they...