Discussion on GDP in Finance from GDP: An Affectionate History, Chapter 5// The Great Chance

I am assigning a 2-3 page summary of the first discussion. 1 ½ line spacing is preferred. I am looking for evidence of the major points the class (and the instructor) made during the first discussion. You are not responsible for items from the question cluster that we did not get to. You can do this either as a free written essay or in a question-and-answer format. You have some freedom in selecting the major points of the discussion, but I will be looking for some attempt to capture the points we spent the most time on as well as those that explain how value added is measured in finance and some of the controversies around that measurement. You will not be graded on writing style as long as we can understand the points you are making. I
Discussion on GDP in Finance from GDP: An Affectionate History, Chapter 5// The Great Chance

How did the treatment of the financial sector in GDP affect the measure of economic growth and the value to economic integration before the crisis?(a) Why did the financial sector produce arrogance that ”lead to follies”? (b) What affect did this have on policy? (c) What affect did this have on economic development? (d) Why might GDP growth not be a good measure for the success of the ”Chinese” model? (e) Why does the author find the behavior of the financial sector in England in 2008 as documented by GDP non-credible?2. What do statisticians attempt to measure when it comes to GDP in the financial sector?(a) How do statisticians typically measure GDP in service sectors (reading previous chapters may help answer this)? Why are fees traditionally important? Why do fees not help in the financial sector? (b) What is meant by FSIM? What does it try to measure? What is meant by a risk-free rate? How is it calculated?1(c) What does the author mean by the phrase ”taking risk is not a valuable service to the rest of the economy though managing risks is? Why does the author believe that risk taking is not the special activity of banks? What role does leverage play in these issues? (d) What are the quantitative effects of adjusting financial sector returns for risk? (e) What are the policy implications of adjusting financial sector returns for risk?3. How has the measure of financial sector output evolved over time?(a) How was financial sector output measured in the 1950’s? What was subtracted from their returns? (b) How did the 1968 SNA treat financial sector output? What is meant by the phrase IBSC? How was it used in measurement and how would this have affected aggregate GDP? (c) What does the author mean when it quotes Brett Christopher as writing ”Instead of assessing banks’ borrowing and lending activities together and intimating that the combination consituted a portfolio of services whose collective value could be imputed by deducing interest paid on the former to the latter, SNA 1993 seperates the two functions and defines each-independently-as a productive activity whose output can be measured? Why does GDP separate such activities?4. What is the significance of the production barrier?(a) What are some goods and services that National Accounts treats differently? How has this evolved over time? (b) How has GDP traditionally treated the informal sector of the economy? How would one measure output in this sector for alternative treatments? What would be the best guess at the effects of adding the informal sector to GDP? (c) How does GDP account for household production? How can it be measured outside GDP? What conclusions can be drawn from these measures?2(d) How does GDP account for pollution? How have outside researchers sought to broaden the measure of GDP in this regard? What conclusions did they reach? (e) What is NNP? What issues does this measure deal with? How is it measured? Why does the author believe that this measure is closer to welfare than GDP?