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It's weird to just make up imaginary services. There's no 'imputed rent' for those who own cars rather than renting them. The fact that a government decided to restrict the production of houses while encouraging mass immigration and some baby boomer's property has appreciated 10x and said boomer still lives in that house is not productive economic activity like the production of food, oil or electricity. If banks encourage property bubbles and raise house prices, that's not productive activity.
We talk about GDP because it's supposed to be measuring productive economic activity.
So the engine is still included in GDP, as a double negative. I'll say it again, building engines is included in GDP.
Singapore produces lots of useful goods. Key exports include refined petroleum, integrated circuits, computers, electronics and telecommunications equipment, pharmaceuticals, and chemicals. They also have a large financial sector. It's not necessarily bad to have a large financial sector but it doesn't contribute so much to wealth as industrial production.
Trading firms make profits via high speed trading. Those profits then move out into the rest of the economy via wages, dividends, investment. Therefore high speed trading is effectively part of GDP, despite not being very productive.
GDP doesn't just measure goods and services produced in an area, it measures imaginary fabrications as well, without regard for the desirability and quality of the activity in question. It is ironically similar to how Soviet central planners would set targets for weight only to get unusably heavy chandeliers, GDP privileges quantity over quality and often departs from reality. Building jet engines is just an example of a high quality activity. Of course in economics all statistics are flawed in some respect. GDP is just particularly flawed.
An old joke: Two economists are walking in the forest, when they come across a pile of dog shit. The first offers the second $1000 to eat it, which he does. They continue, and encounter another pile of dog shit. This time, the second offers the first $1000 to eat it, which he does. The first says "You know, we're back where we started, but we've both eaten shit. I can't help but think that we didn't do anything of value." The second replies "That's not true - we increased GDP by $2000."
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Use value of cars is sometimes imputed (for tax purposes), but not for GDP, probably because it wouldn't be enough to matter. They do impute the fees you don't pay on "free" checking and savings accounts, and it's a fairly large amount -- the difference between the interest rate you get (usually 0) and the interest rate on government securities (now around 3.5% I believe). Note that mortgage interest is deducted from imputed rent (or it would be double-counted), so "imputed car lease payments" would also deduct (actual) car financing costs, which reduces the significance.
It's definitely weird. It's weird that GDP goes up when property values go up despite no transaction happening. But it would be weirder if GDP went up when rented property increased in cost but not owned property. There's no perfect way to do it.
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Industry of any kind accounts for just 25% of Singaporean GDP. 75% comes from services. Singapore is a country that is prosperous from providing services, not exports.
This is a sleight of hand. You say HST is part of GDP despite not being productive. But buying and selling stocks does not contribute to GDP.
An HST firm makes a profit on a trade and pays an employee his salary. The employee gets a haircut and pays the barber. What part of this story is included in GDP? It's the haircut, not the trade.
Is imputed rent the only such "imaginary fabrication" in your view? Seems easy enough to just take it out of the equation.
Compared to what?
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