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repetitive bleats

Property Inflation As Gdp

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Yesterday there was a post about imputed rent which is an imaginary figure which is applied to the amount of rent that a 'home owner' would pay if they were paying rent and which accounts for over 10% of GDP.

It got me wondering. Just how much of GDP is made up from imaginary rent, real rent, house sales, new mortgages and re-mortgages, insurance cover for loans, estate agents, commissions etc.

Any ideas?

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I'd ask your question here in the comments section.There are some very knowledgeable commenters there besides Shaun Richards himself.

http://www.mindfulmoney.co.uk/wp/author/shaun-richards/

I'm not sure tehre's anything else as blatantly made up as imputed rents but he did a recent piece on the double counting of R+D.

April 8 2014

'The UK Office for National Statistics yesterday announced its plans to undergo a substantial revision of UK economic output measurement.

So as we progress through the autumn we will all be richer? I am afraid not. It would be more accurate to say that reality will be unchanged but we will be told that economic output is higher. Many of you no doubt will be thinking that this is a very convenient change for our political class at a time like this, although when the statisticians were planning this they did not know what things would be like now.

What are the changes which cause this?

The largest comes from the treatment of Research and Development or R&D.

In ESA2010 the asset boundary is extended to recognise expenditure on R&D as an investment in R&D assets which should be capitalised. It will therefore be included in gross fixed capital formation rather than intermediate consumption. This means that, for the first time, expenditure on R&D will directly contribute to GDP.'

More at the link.

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It got me wondering. Just how much of GDP is made up from imaginary rent, real rent, house sales, new mortgages and re-mortgages, insurance cover for loans, estate agents, commissions etc.

Any ideas?

110%

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I'd ask your question here in the comments section.There are some very knowledgeable commenters there besides Shaun Richards himself.

http://www.mindfulmoney.co.uk/wp/author/shaun-richards/

I'm not sure tehre's anything else as blatantly made up as imputed rents but he did a recent piece on the double counting of R+D.

April 8 2014

'The UK Office for National Statistics yesterday announced its plans to undergo a substantial revision of UK economic output measurement.

So as we progress through the autumn we will all be richer? I am afraid not. It would be more accurate to say that reality will be unchanged but we will be told that economic output is higher. Many of you no doubt will be thinking that this is a very convenient change for our political class at a time like this, although when the statisticians were planning this they did not know what things would be like now.

What are the changes which cause this?

The largest comes from the treatment of Research and Development or R&D.

In ESA2010 the asset boundary is extended to recognise expenditure on R&D as an investment in R&D assets which should be capitalised. It will therefore be included in gross fixed capital formation rather than intermediate consumption. This means that, for the first time, expenditure on R&D will directly contribute to GDP.'

More at the link.

Great site. Thanks for the heads up

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