Lady Gaga Writing A New Song Is Like A Factory Investing In A New Machine | WAMU 88.5 - American University Radio
Filed Under:

Lady Gaga Writing A New Song Is Like A Factory Investing In A New Machine

Play associated audio

I spoke yesterday with Dan Sichel, a Wellesley economist and a Lady Gaga fan. Both of these facts are relevant for this story.

The U.S. government is about to tweak the way it measures the economy, and some of the biggest changes will affect the entertainment industry.

Under the current system, Sichel told me, Lady Gaga's sales of concert tickets, online songs and CDs all count toward gross domestic product. But the value of the time she spends in the studio working on new songs isn't counted. That's about to change.

"It's quite analogous to a factory investing in a new machine," Sichel says.

Under the new rules, Lady Gaga sitting in front of her laptop, staring at the sky, thinking up new songs will count as investment, which is part of GDP. A similar change is coming for movies.

Money companies spend on research and development will also be added to GDP.

Why haven't these things counted before? The accounting rules for GDP were written in a simpler time, when most companies produced physical things. But over time, the economy has increasingly shifted toward producing intangible goods.

In all, the tweaks will add an estimated 3 percent to the size of the U.S. economy. Historical GDP numbers will also be adjusted, so the charts won't show any big jump. And for most people, the important thing to pay attention to is not the absolute size of GDP, but the change over time: How much is the economy growing?

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

NPR

Mexican TV Icon Roberto Gómez Bolaños Dies At 85

The actor, writer and director was a staple of Mexican television comedies and children's programs for decades.
NPR

From Humble Salt To Fancy Freezing: How To Up Your Cocktail Game

You don't need to have liquid nitrogen at your next cocktail party — but it's certainly a sure-fire way to impress your guests. Expert mixologist Dave Arnold walks you through it.
NPR

Week In Politics: Hagel's Resignation, Ferguson Grand Jury Decision

NPR's Ari Shapiro speaks with E.J. Dionne of The Washington Post and Brookings Institution and David Brooks of the New York Times about the grand jury's decision not to indict police officer Darren Wilson and the resignation of Defense Secretary Chuck Hagel.
NPR

Millennial Doctors May Be More Tech-Savvy, But Is That Better?

Text messages from your doctor are just the start. Millennials are the next generation of doctors and they're not afraid to say "chillax" in a consultation or check Twitter to find medical research.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.