If only Berlusconi had thought of this…
Bloomberg’s Businessweek has a story that Italy plans to include prostitution and illegal drugs in GDP. The move will raise GDP and allow Italy to get under European thresholds.
By counting prostitution and drugs in output, Italy will raise its GDP and thereby lower the ratio of debt to GDP, which will make it easier to comply with European Union rules on indebtedness.
Update: I understand that other countries in Europe will do this as well. So it’s a continent-wide scam rather than a national one. Ultimately, the bondholders decide what they’re pay for the bonds so they can jack up GDP however they want and it only matters so long as they can sell bonds.
