Tuesday, 4 November 2008

“Like a thief in the night” Are we underestimating the Service sector output?

A great new publication by Dr. Gerben Baker “Entertainment Industrialised: The Emergence of the International Film Industry, 1890 -1940”
Dr. Gerben argues that we are underestimating the GDP by simply not measuring services correctly thus we see their impact but we can’t spot it in productivity estimates. He argues convincingly that if Service activities such as film and television were measured based on the leisure time they provide then we would be bale to better capture the tremendous growth in services and their impact in our life.
This should be noted by the statistical offices on Cyprus and Malta since so much of their economies is based on service provision – and estimating their output is sometime just not good enough to encapsulate their economic impact and social impact. New service industries (such as software development, social networking sites and online betting) need new ways to estimate their output and their productivity impact in the economy – and the statistical offices can be pioneers in such developments.

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