Olivia Asher is a reporter at the New Herald Tribune covering breaking news for the Digital Trends Desk. Before joining the newsroom in 2022, she covered criminal justice issues at the Orlando Plain Dealer.
March 3 , 2025
Atlanta - The Federal Reserve Bank of Atlanta announced today that its GDPNow index will begin incorporating fraud as part of its GDP calculations. The decision comes as economists at the Atlanta Fed argue that fraudulent activities contribute significantly to economic output and should be reflected in GDP estimates.
Chairman of the Atlanta Fed, Dr. Eliza Thornton, stated in a press conference, "Our analysis shows that fraud has become an increasingly substantial component of economic activity. By including it in our GDPNow model, we aim to provide a more accurate representation of the economy's true size and growth rate."
The inclusion of fraud is expected to boost GDP figures considerably in the coming years. Dr. Thornton noted, "Based on our preliminary estimates, accounting for fraudulent activities could potentially increase GDP growth by 1.5 to 2 percentage points annually."
This decision has sparked debate among economists and policymakers. Proponents argue that it reflects economic reality more accurately, while critics worry about the ethical implications and potential encouragement of illegal activities.
The move comes at a time when the GDPNow model has been forecasting negative growth for the first quarter of 2025. As of March 3, 2025, the model predicted a contraction of 2.8% in GDP, a significant drop from earlier projections14.
Dr. Thornton emphasized that the inclusion of fraud in GDP calculations is not an endorsement of such activities but rather an acknowledgment of their economic impact. "We must stress that this change in methodology does not in any way condone fraudulent behavior. It is merely a recognition of its existence and influence on our economy," she stated.
The Atlanta Fed plans to implement this change in the GDPNow model starting next quarter. Economists and market watchers will be closely monitoring how this new approach affects GDP forecasts and whether other economic indicators will follow suit.
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