Limitations of GDP: Unpaid Work and Shadow Economy

This lecture discusses the limitations of GDP, focusing on unpaid work and the shadow economy. It explains how GDP fails to account for unpaid activities like home care and volunteering, as well as illegal activities in the shadow economy. The importance of unpaid work in Switzerland is highlighted, showing the significant monetary value it holds. The lecture also delves into the informal labor sector in India and presents the MIMIC model for estimating the shadow economy. By exploring the reasons why unpaid work is excluded from GDP and the challenges in measuring the shadow economy, the instructor sheds light on the complexities of economic indicators.