[OPE-L:5727] Re: Question about NIPA

Gerald Levy (glevy@pratt.edu)
Sun, 16 Nov 1997 18:22:50 -0500 (EST)

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Andrew K wrote on Fri, 14 Nov:

> The textbooks and dictionaries say that only the value of "final" goods and
> services is counted in GDP, GNP, etc. The textbooks also make an argument
> that only "final" goods and services are counted because otherwise you have
> "double-counting." <snip>
> So my question is, why do they say that only production of "final" goods and
> services is included? If the NIPA are correct, then this isn't correct,
> because new factories (plant), machines (equipment), and stocks of steel,
> coal, fabrics, etc. (inventories) are definitely not "final" goods -- they
> re-enter production.
> Can anyone help?

I will admit to not being an authority in this area, but I believe the
issue concerns how *intermediate goods* are accounted for. E.g. if bricks,
sold by brick capitalists to construction firms are used as "intermediate
goods" by the construction firms, then the NIPA method means that we don't
count the same bricks twice.

In solidarity, Jerry