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Flutter's avatar

What is the effect on the GDP and the well-being of Canadians?

Asked by Flutter (1 points ) December 11th, 2012

When war breaks out overseas and Canadians are involved

I think GDP increases, because of the increase in production of the weapons and related ammo. But, what would the well being of Canadians be based on the GDP?

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5 Answers

tedibear's avatar

Welcome to Fluther! This looks much like a homework question, though I could be wrong. But I doubt it in this case.

Clue us in on the answers that you’ve developed so far and I’m sure that people will be happy to help you work out the answers via discussion.

CWOTUS's avatar

Welcome to Fluther.

You need to take a glance at the broken window theory of economics.

If it were true that war and disaster (because of the increases in production that each require, and the jobs created in weapons production – as well as soldiering itself – and disaster recovery and rebuilding) create jobs and economic activity. But you need to see (as Bastiat was able “to see what is not”) the opportunity costs of war and natural disaster (“broken windows”).

There may be a nominal increase in GDP, because of the way that is measured. But the loss of capital is not measured; that’s the opportunity cost – and it is a very real cost to the humans who have to pay it.

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dabbler's avatar

@CWOTUS Well put answer.
Bottom line : GDP is a statistic. And such things are prone to leaving things out according to the convenience of the one who defined them. In this case GDP is defined by economists, who are not accurate approximately all the time.

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