Brynjolfsson's GDP-B paper quantifies the welfare value of free goods like Facebook, published in AEJ
soumitrashukla9 · x · 2026-11-12
Economist Avinash Collis shared his paper with Erik Brynjolfsson et al., "GDP-B: Accounting for the Value of New and Free Goods," published in AEJ: Macroeconomics (October 2025), noting many economists still miss the point.
Standard metrics like GDP and productivity fail to capture the welfare contributions of new and free goods. The authors derive explicit terms for these contributions and introduce the GDP-B framework, applied empirically to Facebook and smartphones. The paper stresses GDP measures production, not welfare, so welfare cannot generally be inferred from GDP changes when free or new goods are involved.
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