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Is GDP Wildly Underestimating GDP?

45 点作者 d4nt超过 9 年前

9 条评论

yummyfajitas超过 9 年前
I don&#x27;t even think that it is only the non-traded sectors (e.g. Wikipedia, Facebook, online dating) where we&#x27;ve gained massive utility that is not tracked in GDP.<p>Consider medicine. In the official statistics, medicine drastically drags down (real) GDP by contributing heavily to inflation. But I propose that medicine has suffered <i>deflation</i> which is just not captured by existing inflation measurements. Note that absolutely no hedonic adjustment is applied to medical costs in official statistics - if we move from dying a painful death (cost $10) to taking a magic pill that solves all the problems (cost $100), that&#x27;s treated as 900% inflation.<p>Ask yourself - 1970 medicine at 1970 prices (i.e. you can&#x27;t use anything that reached the market in 1971 or later), or 2015 medicine at 2015 prices. If you choose the latter then medicine has suffered deflation.<p>It&#x27;s a very interesting exercise to re-compute standard statistics based on CPI measures which simply exclude medical inflation (let alone recognize deflation).
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nhaehnle超过 9 年前
As much as I would like to believe that there has been a massive qualitative change in the meaningfulness of GDP caused by the internet, I would like to see a comparison across multiple countries. <i>If</i> that qualitative change is real, then it should be visible elsewhere in the world as well, possibly with some time shift.<p>Right now, the first two bumps in the graph coincide uncomfortably with two burst bubbles (which does not fully refute the idea, but it means it must be taken with a whole lot of salt).
adventured超过 9 年前
It&#x27;s not a coincidence that separation point in the chart begins shortly after the Fed began heavily harming the US dollar and promoting a bubble dependent economy based on asset inflation schemes (the first point of separation represents the real estate bubble and the beginning of the 2005-2007 soft bubble of the stock market). You can also witness the exact same spike in the GDP of every other country on earth when priced in US Dollars, nicely showing off how dramatically the Fed was harming the currency (give it a try, type in: &quot;romania gdp&quot; or &quot;peru gdp&quot; or any country, into google and look at how they all perfectly skyrocket at exactly the same time, in tandem with the USD falling and coinciding with the lift-off in this article&#x27;s chart).<p>The huge jump in household assets is the representation of the Fed inflating, which simultaneously debases the median (and below), while increasing in <i>nominal</i> terms the wealth of the top ~10% (who can hedge and dodge inflation for the most part, while worker incomes and basic savings cannot).<p>Bill Gates is worth $84 billion, right? The rich have gotten a lot richer, right? No they haven&#x27;t, they&#x27;ve merely kept up with the Fed debasing the dollar. Everyone else has gotten poorer. If you inflation adjust the rich backwards, they&#x27;re only slightly richer than they were 20 years ago. Gates is lucky if he&#x27;s worth $40 billion in 1997 terms. Whether we&#x27;re talking about housing, oil, gold, silver, platinum, copper, milk, eggs, education costs, health care costs, car costs or nearly anything else - you can roughly increase those costs by 70%-100% (at least, more in the case of edu and health care) over 20 years due to Fed inflation.
timtas超过 9 年前
The author notices the divergence, but he doesn&#x27;t seem to notice that a new pattern has emerged. Forty years of smooth increase has morphed into to something like a roller coaster. He looks past these chronic spasms to see a secular shift -- &quot;continued exponential growth of household net worth.&quot; It turns our that wealth _can_ durably outstrip savings! He doesn&#x27;t wonder whether another steep (perhaps steeper) plunge of asset values might be in store.[1]<p>There&#x27;s nothing mysterious here. For a century it has been well understood how artificial credit expansion inflates asset bubbles causing the boom&#x2F;bust cycle.[2] Only the intellectual progeny of Keynes continue to find it mysterious and feel compelled to invent exotic new explanations for such &quot;paradoxes.&quot;<p>Why ever would we be surprised at inflating asset prices when it&#x27;s been Fed policy for a long time. In the words of Bernanke, &quot;...higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.&quot;[3] In other words, new paper wealth makes consumers feel richer so they&#x27;ll stop that harmful saving.[4]<p>[1] He notes, &quot;The valuation jumps up and down as asset markets re-evaluate what all those real assets are worth.&quot; but without wondering why they only started &quot;jumping up and down&quot; in 1999.<p>[2] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Austrian_business_cycle_theory" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Austrian_business_cycle_theory</a><p>[3] <a href="http:&#x2F;&#x2F;www.marketwatch.com&#x2F;story&#x2F;bernanke-defends-qe-talks-wealth-effect-in-op-ed-2010-11-04" rel="nofollow">http:&#x2F;&#x2F;www.marketwatch.com&#x2F;story&#x2F;bernanke-defends-qe-talks-w...</a><p>[4] <a href="https:&#x2F;&#x2F;mises.org&#x2F;library&#x2F;hayek-paradox-saving" rel="nofollow">https:&#x2F;&#x2F;mises.org&#x2F;library&#x2F;hayek-paradox-saving</a>
Animats超过 9 年前
This needs more detail about how real estate value changes are counted. Also, how does this account for the transition from fixed-benefit to fixed-contribution pensions?<p>Of course the savings rate is down. US retail real interest rates are negative. Save now, have less later.
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vladd超过 9 年前
I&#x27;m trying to understand better the graphs: if this year a house in Manhattan appreciates in value, it won&#x27;t reflect in GDP but it would reflect in the asset growth curve?<p>This might be a cause for the disconnect of the curves. If the economy is building specific surface hot-spots (city centers) that are allowing people to better monetize their job&#x2F;time, a real estate increase of that (asset bubble or not) will drive assets up without a GDP equivalent increase?<p>(I understand the real estate goes up because the producing GDP in that area also goes up. But it&#x27;s like comparing asset price versus rent: the later reflects the GDP but goes up in absolute value much less than the asset value increase)
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fiatmoney超过 9 年前
For all the talk of non-tradeable sectors being undercounted, there has also been a vast overcounting of non-tradeable sectors that became tradeable (but not necessarily &quot;better&quot;).<p>Child care, health care, senior care, security, and education are just some examples - to a much greater extent they used to be handled, untracked, within the context of a household, until they were commercialized.
rdlecler1超过 9 年前
I&#x27;m not an economist, but could tax inversions cause this. Asset values rise, but capital stays offshore and doesn&#x27;t circulate back into the economy thereby limiting saving.
sukulaku超过 9 年前
&gt; The asset markets are wrong. They’re <i>wildly overestimating the value of our existing stock of real assets</i>, and the output&#x2F;income they’ll deliver in the future. See: “Irrational exuberance.”<p>Bingo! Massive stock bubble driven by easy money and (more recently) corporations buying back their own stock (with borrowed money) to drive up the price of the stock remaining on the market.<p>Besides, GDP doesn&#x27;t represent the total of &quot;real wealth&quot; or <i>productive</i> activity either.<p>The GDP is inflated because it contains all activity regardless of whether it was actually productive or not. For example, if the government hired a million people to dig ditches and fill them up again, that would raise the GDP, but it sure wouldn&#x27;t increase the nation&#x27;s wealth.<p>They&#x27;ve even changed how the GDP is calculated to make it look bigger: <a href="http:&#x2F;&#x2F;seekingalpha.com&#x2F;article&#x2F;1368001-u-s-governments-new-way-of-calculating-gdp" rel="nofollow">http:&#x2F;&#x2F;seekingalpha.com&#x2F;article&#x2F;1368001-u-s-governments-new-...</a>
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