Economy Works Differently: Any Good Entrepreneur Drives Investment by Its Future Earnings Rather Than Its Spending, So Why Do Governments Drive by GDP (Consumption+ Investment Spending)?

Authors

  • Didier Vanoverberghe Mines ParisTech, PSL

DOI:

https://doi.org/10.33423/jabe.v25i4.6414

Keywords:

business, economics, wealth, debt, macroeconomics, finance, unified theory, Friedman, Keynes, Barro Ricardo equivalence, 2 Cambridges controversy, capital, investment, valorisator, GDP, NDP, Permanent Income Hypothesis

Abstract

GDP, even net of obsolescence (NDP) has to be considered only as an expense (investment is an expense; consumption is an expense). As an entrepreneur you will never manage your investments by looking only the expenses; it is clear you will make decisions on gains. As a person, will you look at the expenses you make to acquire stocks or at the gains? Thus it must have been clear that you will never manage a country by costs, so why do governments use GDP (consumption plus investment spending) to drive their economy? Governments should manage gains: wealth created, which is the full result you get from all these expenses.

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Published

2023-09-28

How to Cite

Vanoverberghe, D. (2023). Economy Works Differently: Any Good Entrepreneur Drives Investment by Its Future Earnings Rather Than Its Spending, So Why Do Governments Drive by GDP (Consumption+ Investment Spending)?. Journal of Applied Business and Economics, 25(4). https://doi.org/10.33423/jabe.v25i4.6414

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Section

Articles