Traditional criticisms of GDP generally focus on its ‘P’ and ‘G’, the fact it is only a measure of gross output, without offering any insight into well-being and sustainability. Globalization adds in the ‘D’ problem, with the increasing difficulty of determining the location of major segments of production by multinational companies. When distinct factors contribute to production from several sites, there is effectively no analytical way of characterizing what each of these factors produces on its own in each of these sites, a fortiori for intangible factors that are located in a purely conventional way. An interpretation of GDP in terms of income avoids this problem; it invites us to distinguish between income associated with mobile or volatile factors and income attributed to factors that can be deemed purely domestic. It also clarifies the links with the issue of measuring well-being.

Citation: Blanchet, D. (2020). What Should the Concept of Domestic Production Mean in Globalized Economies? Economie et Statistique / Economics and Statistics, 517‑518‑519, 205–214. https://doi.org/10.24187/ecostat.2020.517t.2019