The epidemic, like a clever magician, continues to pull new surprises out of the bag.
The report of the International Organization for Economic Cooperation and Development (OECD), which includes the most developed countries, notes that in the second quarter of 2020, real incomes of the population grew by 5.3% compared to last year. With all the quarantines, self-isolation and removal! But at the same time, the notorious GDP fell by 10.6%. The economy slowed down, and the citizens (there, with them!) Continued to almost flourish. It happens?
“Not in life!” – the sages from the Russian government will shake their heads. And they wonder: “Probably, they learned to” count “from our Rosstat?” The Cabinet of Ministers is not praying for this three-letter word “VVP”, and they would have hung his image in their offices long ago if the place had not been taken. They calculate, squeeze out its growth drop by drop, in tenths and hundredths of a percent, in order to report to the authorities about the tremendous success. Not caring too much if citizens have enough income to pay for food. They won’t ask for it.
Experts say that the indicator was proposed in 1934 by an emigrant from Russia (of course!), American economist Simon Kuznets. In 1971, he even received the Nobel Prize for “an empirically grounded interpretation of economic growth …”.
Without going into crazy, let us explain that GDP is the sum of the prices of all products and services rendered during a certain period of time, consumed domestically and sold abroad.
Serious economists understand that this indicator is very conditional: the value of GDP, the rate of its growth, and even the volume per capita reflect only the dynamics of economic activity in the country. Of course, you can, if you wish, discern the magnitude of both national wealth and the well-being of citizens, but experts make a reservation – only to a certain extent. In the sense – it is not necessary to make a cult out of GDP and argue to the point of hoarseness about its growth in a fraction of a percent.
According to economists Mikhail Eskindarov and Dmitry Sorokin, “the current compilers of forecasts and programs should set more understandable goals: life expectancy, ensuring decent working conditions that allow increasing the production of competitive products, solving the housing problem, education and access to cultural values, overcoming excess poverty” …
Our authorities are aiming at something else. Therefore, they allocated money to the population in small crumbs this viral summer. While in OECD countries, governments have given out hundreds of billions of dollars, even trillions, to support citizens and businesses. People have retained income and consumer demand, which in turn pushes real production forward.
In the Russian Federation, as you know, people’s incomes collapsed by 8%. And what joy to them that our notorious GDP fell by the same 8% – less than in the USA, Germany and Canada?