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From:
[log in to unmask] (Benjamin Kahn)
Date:
Tue May 2 08:14:43 2006
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One comment for Samuel Bostaph and a question for Richard Lipsey:  
  
On the note that Sam Bostaph makes about GDP increasing when a man marries  
his housekeeper, I wonder why you treat marriage as simply the addition of  
sexual favours into the equation of a relationship between man and woman,  
and that only from the male perspective... You forgot to mention that the  
housekeeper as a result of marriage loses her wage, or maybe her 'allowance'  
goes up, but by now, this is simply two people spending the same income, and  
not an employer and employee earning (and paying taxes) out of two incomes.  
Of course the fun begins when you ask what the woman is willing to pay for  
sex? (Why should the man pay, and the woman receive?) and more widely what  
are the new dynamics of the relationship... (Does the husband do housework  
now? Will there be a new maid?) - the argument put forward seems very  
narrow.  
  
More technically, If the housekeeper forfeits her salary, 'GDP' would be  
lower from a as we would account 'income' by tax records, and there would be  
fewer of those (that being said, rarely is the accounts actually estimated  
with income tax accounts).  
I guess one could argue that the two people still have the same income  
together and spend it together, so presumably effective demand, or the  
consumption in the economy should stay the same - so GDP would not move  
anywhere... Why GDP would rise, I fail to comprehend.  
  
My question for Richard Lipsey is this: I agree that the National Income  
Accounts have a history and have developed in a certain path, and you say "If  
we had it to do over again, we would do it differently." - so very simply,  what would you
do differently?
  
Regards  
  
Benjamin Hav Kahn  
  

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