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Per person income is 50 percent higher in Emilia Romagna than the national average.

GDP is a macroeconomic measure with only a tenuous relation to microeconomic well being.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat Jun 24th, 2006 at 10:02:12 AM EST
[ Parent ]
I've read a few more things and may be the member number includes members of consumer co-op so it's not really comparable to the GDP "per person".

I agree that GDP (unless there's a factor of 10) is a very poor indicator of well-being (unsurprisingly since it was invented to measure things for monetary policy purposes :).

by Laurent GUERBY on Sat Jun 24th, 2006 at 10:54:03 AM EST
[ Parent ]
I think these figures mix up members of workers' co-operatives, farmers' co-operatives, consumers' co-operatives and financial co-operatives. In the last three, members are not necessarily employees. Also, one can be a member of several co-operatives...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Sun Jun 25th, 2006 at 09:51:45 AM EST
[ Parent ]
Yes : "member" of a cooperative does not necessarily equal "producer".
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jun 26th, 2006 at 04:10:15 AM EST
[ Parent ]
It doesn't do monetary policy very well either ...

If I, in my role as a Money Market Bank, lend you $100 million and you, in your guise as a Financial Investment Firm, lend it to Jerome, in his guise as an oil investment banker, who lends it back to me total GDP has risen by $300 million even tho' no economic activity has taken place.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Jun 25th, 2006 at 10:26:22 AM EST
[ Parent ]
Well, in that situation the money supply has also increased by $300M.

Maybe our monetary theory is fucked up because our monetary system is fucked up.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Jun 25th, 2006 at 10:33:58 AM EST
[ Parent ]
Only if, as a MMB, I go to the appropriate Central Bank, use the loan as collateral to borrow, and the CB has to issue more money to cover the amount of the loan, thus increasing M3.  (That's what M3 is all about.)  Otherwise it's just the same amount of money sloshing around the system.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun Jun 25th, 2006 at 11:37:10 AM EST
[ Parent ]
The CB doesn't have to issue more money (that's a component of M1, isn't it?). The lenders could put the $100M in one or more bank accounts, and depending on the kind of account it would count as M1, M2 or M3. What am I missing?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Jun 25th, 2006 at 12:40:27 PM EST
[ Parent ]
M1 is the total estimated amount of specie plus immediately available funds.

M2 is M1 plus time related deposits.

M3 is the total estimated (WAG) amount of a currency in existence in any form.

The CB can interject extra money into the system at each of the 3 levels although the national Treasury and Mint usually have oversight and control of M1.  Whether a CB uses M2 or M3 depends on the policies (goals) and the situational analysis and decision making processes of the various CBs.  

(And you thought I couldn't drag in Epistemology, huh?  :-)  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Jun 25th, 2006 at 01:11:13 PM EST
[ Parent ]
If my way of giving you a loan is to open an account for you with a balance of $100M, doesn't that increase the amount of "currency in existence in any form" without CB involvement?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Jun 25th, 2006 at 01:22:51 PM EST
[ Parent ]
I was under the impression that only banking fees were included in GDP for lending.

What you describe looks like more money creation in our fractionnal banking system, am I wrong?

by Laurent GUERBY on Sun Jun 25th, 2006 at 12:22:54 PM EST
[ Parent ]
I would maintain a primary economic activity of banks, considered generally, is to make loans.  If it isn't economic activity I'm bewildered as to what else to call it.  But I'm not going to be dogmatic about that or how financial transactions are measured within GDP calculations as I don't think GDP means diddly - Self-Referencing the Subject line of this thread.  ;-)

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun Jun 25th, 2006 at 12:42:41 PM EST
[ Parent ]
Only banking income (i.e. fees and margins - i.e. not the whole interest rate) is counted in GDP.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Jun 25th, 2006 at 01:03:12 PM EST
[ Parent ]
Thanks Jerome!
by Laurent GUERBY on Sun Jun 25th, 2006 at 01:23:08 PM EST
[ Parent ]

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