64698
Home renovation and movie production should be able to boost GDP.
Home renovation and movie production should be able to boost GDP.

Japan Eyes Wider GDP Basket

Japan Eyes Wider GDP Basket

Japan seeks to broaden the scope of activities reflected in the country’s gross domestic product, factoring in technology and service-sector developments to increase the accuracy of the economic indicator.
A revised GDP could include activities such as car and home sharing as well as investment in intellectual property under the government’s proposed changes, a final report on which is due out Friday. The changes are expected to appear in an economic and fiscal policymaking plan to be compiled in June, Nikkei reported.
Today’s GDP cannot fully capture how the internet has reshaped the ways in which people live and corporations make money. A more accurate GDP could help the government develop better economic policy.
Film production is one area where the changes would apply. At present, only limited factors such as box office sales are factored into GDP. Production costs are treated as an expense, like parts and materials, and therefore subtracted from the added value of the output.
Under the government’s proposals, film production costs may be treated as investment starting in 2020, becoming partly reflected in GDP.
Another economic activity likely to be affected is home renovation, which has picked up thanks to the Bank of Japan’s policy of maintaining ultralow interest rates. The Japanese market for such work is estimated to surpass five trillion yen ($44.2 billion), but small-scale renovations of less than 10 sq. meters now are mostly excluded from GDP under the category of investment.
The industry is seen growing over the long term as a rising number of empty homes—due to a shrinking population—find new uses. Some observers say changing how renovations are counted would lift GDP by a few trillion yen.
When Japan refigured GDP calculations in December to treat research and development spending as a value-creating investment rather than a business expense, the change raised 2011 nominal GDP by nearly 20 trillion yen.
“Renovation and movie production will no doubt boost GDP as well,” said Taro Saito of the NLI Research Institute.
The government is also studying how to include the so-called sharing economy, in which people trade or rent out homes, cars and other property. But any discussions of this topic face the challenge of tracking deals cut between individuals via smartphone.

Short URL : https://goo.gl/4xst9n
  1. https://goo.gl/4GnzhT
  • https://goo.gl/xRAJ5W
  • https://goo.gl/q766fv
  • https://goo.gl/DGtA4D
  • https://goo.gl/wgzO1Z

You can also read ...

India Hits Back at US With Tariffs
Responding to the US import tariffs on certain steel and...
American farmers are losing sales as trading partners hit back with duties of their own.
Only a few months ago, the global economy appeared to be...
Few Will Want to Invest in High-Risk North Korea
US President Donald Trump dangled the carrot of foreign...
Ministers Fired After Argentina Currency Collapse
Argentina’s President Mauricio Macri has replaced two cabinet...
Refugees now comprise about 20% of Jordan’s population.
Saudi Arabia, the United Arab Emirates and Kuwait pledged $2.5...
Businesses in Gaza are cutting back production as a result of falling consumer demand, the prevailing financial sanctions, restricted access to goods and materials, and lack of freedom of movement.
Humanitarian, socioeconomic, political and security conditions...
Greece Creditors Debate Extensions on Bailout Loans
Greek bailout talks are reaching the final stretch and...
Eurozone Reform Agreement
Paris and Berlin are very close to an agreement on eurozone...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus