Could the BP oil spill increase GDP?

Annie Lowrey notes a J.P. Morgan Chase analysis suggesting the BP spill will actually raise the country's GDP, at least in the short term. "Cleaning up the spill will likely be enough to slightly offset the negative impact of all this on GDP, J.P. Morgan said," summarizes Luca Di Leo. "The bank cites estimates of 4,000 unemployed people hired for the cleanup efforts, which some reports have said could be worth between $3 and $6 billion."

This is a nice object lesson in the inadequacy of GDP as a measurement of societal well-being. I could blow up the biggest building in every city in the country and the resulting reconstruction effort could mean a big temporary increase in GDP. But blowing up buildings is not a sustainable way to grow your economy. GDP, of course, has its uses, and as Bruce Bartlett points out, it provides a rich source of historical data and we wouldn't want to abandon it completely. But there's no reason we couldn't also use more comprehensive measures, and this Urban Institute report (pdf) gives a nice overview of what they would look like.

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