Why is the West falling and China growing? - Page 2 - Politics Forum.org | PoFo

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#15185763
Fasces wrote:In other words:

Chinese GDPPC increase (2010-2020): 84.61%
US GDPPC Increase (2010-2020): 17.99%

Chinese GDPPC increase (1991-2020): 2422.52%
Estonian GDPPC Increase (1991-2020): 1842.67%

:lol:

Lies, damned lies, statistics and, the JohnRawls special, statistics without context, meaning or justification.


Here is the thing though. Economy grows in absolute terms and not in relative terms. It is the main reason for the lower growth rates at higher development levels that you still get the same 1000 or 1500 but for you in relative terms it is 2% and so on percent. While for countries with low GDP per capita that is 50% and so on percent ;)

Statisticians measure it in relative terms within 1 country though to demonstrate improvement. That is the ugly truth of the matter.
#15185765
JohnRawls wrote:Here is the thing though. Economy grows in absolute terms and not in relative terms.


Here's the real thing - $1 in the US and $1 in China buy a different amount of shit. If you wanted to make a meaningful comparison, there's ways to do it, but you've again confused cherry-picked meaningless data as making a point and just dumped it in the thread without commentary, as you often do.
#15185766
wat0n wrote:You need to compare ratios here, @JohnRawls. And using PPP figures.


I never particularly understood why PPP is important. All the things that you buy are not produced in your own country to the smallest single component. It is a correction measure to demonstrate that you produce a lot of services, goods and so on but it ultimately doesn't demonstrate how large the average salary and the value of those services are and so on.

As for Ratios, there is an argument to that for internal improvement. A person who was getting 333 in 1991 and is getting 8400 in 2020 does get a lot more salary on average or the services cost a lot more. But that is not very usable metric when we talk about differences between countries. Basically the wages or value of goods in services are raising faster in those countries.

My argument here is not that China didn't improve, my argument is Europe and US are improving faster even although it seems slower when you take it in % terms because Europe and US are not poor places from the start. Well i guess Estonia was pretty poor.

@Fasces

Not sure what your argument is. Sure ratio wise China has improved but in absolute terms the difference is growing larger and larger. If economy improved only in relative terms then it would be almost impossible for less developed countries to catch up to heavily developed countries ever but we obviously know that is not the case through history.
#15185767
Fasces wrote:Here's the real thing - $1 in the US and $1 in China buy a different amount of shit. If you wanted to make a meaningful comparison, there's ways to do it, but you've again confused cherry-picked meaningless data as making a point and just dumped it in the thread without commentary, as you often do.


Yes, that is not an argument. If somebody can sell a car for 40k then it doesn't mean that you selling it for 10k is somehow "better". Your logic applies if any country in the world could produce everything internally. No country in the world managed to do it. Since no country has all productions and all raw materials.
#15185771
JohnRawls wrote:I never particularly understood why PPP is important. All the things that you buy are not produced in your own country to the smallest single component. It is a correction measure to demonstrate that you produce a lot of services, goods and so on but it ultimately doesn't demonstrate how large the average salary and the value of those services are and so on.

As for Ratios, there is an argument to that for internal improvement. A person who was getting 333 in 1991 and is getting 8400 in 2020 does get a lot more salary on average or the services cost a lot more. But that is not very usable metric when we talk about differences between countries. Basically the wages or value of goods in services are raising faster in those countries.

My argument here is not that China didn't improve, my argument is Europe and US are improving faster even although it seems slower when you take it in % terms because Europe and US are not poor places from the start. Well i guess Estonia was pretty poor.

@Fasces

Not sure what your argument is. Sure ratio wise China has improved but in absolute terms the difference is growing larger and larger. If economy improved only in relative terms then it would be almost impossible for less developed countries to catch up to heavily developed countries ever but we obviously know that is not the case through history.


China is undeniably catching up, even though it's still clearly poorer than the US and most European countries.
#15185774
wat0n wrote:China is undeniably catching up, even though it's still clearly poorer than the US and most European countries.


In ratio terms yes, in absolute terms not really.
#15185776
Doubling the minimum wage wouldn't make it a living wage in any US state.

Even with a raise to $15 per hour, a typical family of four couldn’t afford the basics in any U.S. state, according to a CNBC analysis of cost-of-living data assembled by researchers at the Massachusetts Institute of Technology. (This example assumes two kids and two adults working full-time for minimum pay.)
https://www.cnbc.com/2021/02/21/15-mini ... icans.html
#15185777
JohnRawls wrote:In ratio terms yes, in absolute terms not really.


GDP per capita is an exponential process so it makes more sense to use ratios (or logged differences).

As for PPP, you have to use it because non-tradeables are cheaper in poorer countries.
#15185779
wat0n wrote:GDP per capita is an exponential process so it makes more sense to use ratios (or logged differences).

As for PPP, you have to use it because non-tradeables are cheaper in poorer countries.


Yes and No, the value of those services and salary are also important factors because it kinda demonstrates the ability of society to consume and have an internal market.

If you are interested in the amount of services, goods and so on produced then perhaps you are right if that is important to you. If you are a bit more interested regarding the wages and the ability for the internal market to consume goods then nominal is better.

I believe that producing a lot is kinda meaningless, if your country man can't really consume on the world market. There is an argument that a lot of things are cheaper internally for those countries but then again it runs in to the argument that no country produces 100% of all goods in the world or at least 100% of all goods, brands, branded services and so on that are consumed in 1 country.

There is also an argument that having a large nominal GDP per capita makes your society a lot better since you can manufacture cheaper in low gdp countries and consume them in high gdp per capita countries which is the modern world basically.

Both metrics are not ideal and have problems. Ultimately people leave countries and go somewhere else mostly because of larger salary and wages. It is a simplification but not that far from the truth.
#15185780
AFAIK wrote:Doubling the minimum wage wouldn't make it a living wage in any US state.

Even with a raise to $15 per hour, a typical family of four couldn’t afford the basics in any U.S. state, according to a CNBC analysis of cost-of-living data assembled by researchers at the Massachusetts Institute of Technology. (This example assumes two kids and two adults working full-time for minimum pay.)
https://www.cnbc.com/2021/02/21/15-mini ... icans.html


It is very hard to measure every statistic in this regard, you yourself know that minimum wage is a touchy topic for the US while the difference between average, median and minimum wage is huge compared to Europe for example.

Even more is the problem that the difference between every state or part of the country is in effect in every country. So GDP nominal or GDP PPP is the best way to measure development in my opinion. May be Real Gdp also but it also has its problems.

This is an example for both China and US in this regard(Talking about income and the ability to buy houses or whatever else for that money, well houses in this case):

Image
#15185783
JohnRawls wrote:Yes and No, the value of those services and salary are also important factors because it kinda demonstrates the ability of society to consume and have an internal market.

If you are interested in the amount of services, goods and so on produced then perhaps you are right if that is important to you. If you are a bit more interested regarding the wages and the ability for the internal market to consume goods then nominal is better.

I believe that producing a lot is kinda meaningless, if your country man can't really consume on the world market. There is an argument that a lot of things are cheaper internally for those countries but then again it runs in to the argument that no country produces 100% of all goods in the world or at least 100% of all goods, brands, branded services and so on that are consumed in 1 country.

There is also an argument that having a large nominal GDP per capita makes your society a lot better since you can manufacture cheaper in low gdp countries and consume them in high gdp per capita countries which is the modern world basically.

Both metrics are not ideal and have problems. Ultimately people leave countries and go somewhere else mostly because of larger salary and wages. It is a simplification but not that far from the truth.


A large nominal GDP is more useful to gauge financial power. And of course we want to compare how productive the different economies are - if you want to measure consumption, then use a consumption per capita indicator and if you want to measure wages you can compare mean wage levels in PPP terms.
#15185786
wat0n wrote:A large nominal GDP is more useful to gauge financial power. And of course we want to compare how productive the different economies are - if you want to measure consumption, then use a consumption per capita indicator and if you want to measure wages you can compare mean wage levels in PPP terms.


Sure but those statistics take in to account only that 1 factor alone and doesn't say much about general economic situation, so it can be used for single purpose instead of overall economy. While there are no statistics for the SOviet Union online, the problem there was that people had money just nothing to buy and if we used 1 single statistic for that then they would be great on paper.
#15185787
JohnRawls wrote:Sure but those statistics take in to account only that 1 factor alone and doesn't say much about general economic situation, so it can be used for single purpose instead of overall economy. While there are no statistics for the SOviet Union online, the problem there was that people had money just nothing to buy and if we used 1 single statistic for that then they would be great on paper.


Then you want to use the PPP statistic.
#15185790
wat0n wrote:A large nominal GDP is more useful to gauge financial power. And of course we want to compare how productive the different economies are - if you want to measure consumption, then use a consumption per capita indicator and if you want to measure wages you can compare mean wage levels in PPP terms.


Fun fact: US factors its housing market into its gdp figures, i.e rent, sales, etc. China (i.e most countries on the planet) does not.

infuckingflated.
#15185794
JohnRawls wrote:We will agree to disagree on that one.


I mean, you are simply trying to approximate what would the exchange rate be if all goods and services were internationally tradeable, which makes volume of production comparable between countries. That's all.

@Igor Antunov that would be weird, as real estate services are measured globally and it's part of the UN's System of National Accounts. Even imputed rent (an estimate of the rent homeowners would pay if they rented their own dwellings out) is factored in.
#15185796
wat0n wrote:I mean, you are simply trying to approximate what would the exchange rate be if all goods and services were internationally tradeable, which makes volume of production comparable between countries. That's all.

@Igor Antunov that would be weird, as real estate services are measured globally and it's part of the UN's System of National Accounts. Even imputed rent (an estimate of the rent homeowners would pay if they rented their own dwellings out) is factored in.


Yes to some degree i guess. Modern world is all about that though.
#15185803
wat0n wrote:I mean, you are simply trying to approximate what would the exchange rate be if all goods and services were internationally tradeable, which makes volume of production comparable between countries. That's all.

@Igor Antunov that would be weird, as real estate services are measured globally and it's part of the UN's System of National Accounts. Even imputed rent (an estimate of the rent homeowners would pay if they rented their own dwellings out) is factored in.



I know that China like a number of countries in east asia only allows for sales of multiyear year leases on land and property. Rent is local government regulated and not wholly part of the private economy. A tenant does not have a landlord, it's done through government approved agencies acting as middlemen. The enormous housing market is not factored into annual economic activity.

It's a mistake to compare the outputs of different systems for reasons like this. Does not tell whole story. PPP is much more indicative on more fronts.
Last edited by Igor Antunov on 16 Aug 2021 17:09, edited 1 time in total.
#15185805
Igor Antunov wrote:I know that China like a number of countries in east asia only allows for sales of multiyear year leases on land and property. Rent is local government regulated and not wholly part of the private economy. A tenant does not have a landlord, it's done through government approved agencies. The enormous housing market is not factored into annual economic activity.


I see, but even then those government run services are valued (usually at cost).

OTOH, if the real estate prices have gone up in China then this would be reflected in other measures of real estate activity.

@Rugoz indeed, but @JohnRawls is doing cross country comparisons in levels (absolute differences, but the same hold for ratios). I agree though that if you want to compare growth rates you are better off using a real GDP measure.
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