Thursday, May 22, 2014

Italy to Boost GDP by Including Both Prostitution and Cocaine In the Computation

Back in mid-April Izabella Kaminska wrote a piece for the Financial Times:
How Nigeria rewrote its growth story
GDP is not perfect but it is our best barometer of economic prosperity, writes Izabella Kaminska
that discussed some changes to their GDP computation that Nigeria had instituted:
‘Nigeria overtook South Africa on Sunday to become Africa’s largest economy after the government nearly doubled estimates for gross domestic product.’...
Financial Times, April 6

That was on April 11.
I didn't post it because my introduction was much more political than is my usual style:
This piece is, at least by Izabella's standards, a lighthearted romp.
She doesn't dip into the general arguments of the efficacy of GDP to measure things like "Gross National Happiness" even though she probably knows more about the alternative measures than I do.

Neither does she look at the ugly micro of Nigerian sociology, with Easter just around the corner it's probably time to wager on how many Christians the Muslims will burn alive in their churches.
On the bright side rebuilding the church would add to GDP.
As I said, this piece is lighter than that.
The Muslims in question are the group now known worldwide as the kidnappers of young girls, Boko Haram.

On a maybe less somber note, Bloomberg reports:

Cocaine Sales to Boost Italian GDP in Boon for Budget
Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year, a boost for its chronically stagnant economy and Prime Minister Matteo Renzi’s effort to meet deficit targets.
Drugs, prostitution and smuggling will be part of GDP as of 2014 and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.

Renzi, 39, is committed to narrowing Italy’s deficit to 2.6 percent of GDP this year, a task that’s easier if output is boosted by portions of the underground economy that previously went uncounted. Four recessions in the last 13 years left Italy’s GDP at 1.56 trillion euros ($2.13 trillion) last year, 2 percent lower than in 2001 after adjusting for inflation....MORE
Possibly related:
The Sicilian Mafia and the International Lemon Cartel
Police in Italy Seize Mafia-linked assets worth $1.9 billion "Mob was Going Green"
Italian mobsters buck downturn, may target bourse (stock market for you Americans)
Mafia crime is 7% of GDP in Italy, group reports 
Zeitgeist: Mafia Cash Increases Grip on Sinking Italy Defying Berlusconi 
So a Sicilian mafioso walks into HSBC…
Why the Mafia Loves Garbage
"Mafia cash in on lucrative EU wind farm handouts - especially in Sicily"