>And what validity is there in counting software as a "final
>good"? Indeed, what does "intermediate good" mean?
An intermediate good is one used in production. GDP counts only final sales. For example, a washing machine enters the GDP accounts at its final retail sales price; the steel, motor, lights, etc., used to make it don't appear separately; their value is incorporated in the retail sales price. The machinery used to make the washer, however, enters the GDP accounts as a fixed investment. In the old days, software was considered an intermediate good, and so didn't appear in GDP; now it's considered an investment good, and does. This seems conceptually right to me; a part is used up completely in the manufacture of a final product, while an investment good is only partly used up; software is more like a lathe than the tub of the washer.
Doug