Friday, December 6, 2019

Unmeasured Illegal Activities Add Over 1 Percent To US GDP

From The Wall Street Journal, "GDP Doesn’t Include Proceeds of Crime. Should It? Sales of illegal drugs would have added $111 billion to U.S. gross domestic product, according to estimate" by Jo Craven McGinty:
When the U.S. calculates its gross domestic product, it only includes things that are legal. But if the wares of drug dealers, pimps, bookies and other black-market denizens were included, the GDP would expand by more than 1%, according to one estimate.
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Illegal Activities GDP Effect
Source: The Wall St Journal
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... Canada has found that accounting for illicit sales of cannabis alone would add around 0.4% to its GDP. The U.K. has estimated that prostitution and illegal drugs represent around 0.4% of its GDP. And in the U.S., Rachel Soloveichik, a research economist with the Bureau of Economic Analysis, has estimated that in 2017, illegal activities would have added more than 1% to the GDP. She presented her analysis last month at the IMF Statistical Forum.