1/6
Thanks, Diane. You make an important point, which is that the main problem is not that they are lying about their GDP data, as many people assume, but rather that China's GDP data measures things (investment, for example) that in some cases represent real growth in the...
Thanks, Diane. You make an important point, which is that the main problem is not that they are lying about their GDP data, as many people assume, but rather that China's GDP data measures things (investment, for example) that in some cases represent real growth in the...
https://twitter.com/DianeCoyle1859/status/1381494364606758912
2/6
underlying economy and in other cases don't. The problem is that we don't distinguish the difference between the two.
The CIA stats on the USSR, for example, did a better job of measuring "actual" economic activity than the published Soviet reports, but then we simply...
underlying economy and in other cases don't. The problem is that we don't distinguish the difference between the two.
The CIA stats on the USSR, for example, did a better job of measuring "actual" economic activity than the published Soviet reports, but then we simply...
3/6
assumed – incorrectly, as it turned out – that this economic activity must have the same relationship to the underlying economy as it did in more market-driven economies like that of the US and the UK. The fact that economic agents in these economies operate with hard...
assumed – incorrectly, as it turned out – that this economic activity must have the same relationship to the underlying economy as it did in more market-driven economies like that of the US and the UK. The fact that economic agents in these economies operate with hard...
4/6
budget constraints, whereas in the USSR they didn't, should have warned us that at the very least economic behavior followed radically different sets of incentives in the two systems, and so GDP might measure something very different in the USSR than it did elsewhere.
budget constraints, whereas in the USSR they didn't, should have warned us that at the very least economic behavior followed radically different sets of incentives in the two systems, and so GDP might measure something very different in the USSR than it did elsewhere.
5/6
This is why I keep insisting that it is useless to compare China's reported GDP – which is an input measure determined over a year in advance according to political needs, and is always met by forcing local government borrow and spend whatever is needed to...
This is why I keep insisting that it is useless to compare China's reported GDP – which is an input measure determined over a year in advance according to political needs, and is always met by forcing local government borrow and spend whatever is needed to...
6/6
achieve it – to GDP measures of output in countries with very different sets of economic, business, financial and political-economy institutions (and this goes for the PPP adjustment too, which assumes that reported GDP numbers are comparable except for price differentials).
achieve it – to GDP measures of output in countries with very different sets of economic, business, financial and political-economy institutions (and this goes for the PPP adjustment too, which assumes that reported GDP numbers are comparable except for price differentials).
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