GO Is a Supply-Side Statistic Reflecting Say’s Law While GDP Is a Demand-Side Statistic Reflecting Keynes’s Law

I consider the adoption of Gross Output on equal footing with GDP as perhaps the most significant advance in national income accounting since World War II. Steve Hanke says GO is a reflection of Say’s law, a supply-side statistic, while GDP is a symbol of Keynes’s law, a demand-side number (Hanke 2014). The difference is stark. If you use supply-side GO as the proper measure of economic activity, business investment is the most important sector. But if you rely on Keynesian GDP, consumer spending and government stimulus are the most important factors. The rise of GO may also signify a second round of debates between Hayek and Keynes, with GO representing the Austrian perspective (the stages of production), and GDP representing the Keynesian perspective (final effective demand).

—Mark Skousen, introduction to the new revised edition of The Structure of Production, new rev. ed. (New York: New York University Press, 2015), xvi.