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They can only systematically inflate a little bit. By the exponential nature of economic growth, if you overestimate the annual 8% by, say, 2% for a decade, by
by gwern 9y ago
They can only systematically inflate a little bit. By the exponential nature of economic growth, if you overestimate the annual 8% by, say, 2% for a decade, by the end that results in a huge absolute gap between the nominal and real GDP. But the estimates from other methods or just going to China show that the official estimate is fairly reasonable, certainly not off by 10x or anything. Which supports the smoothing interpretation: they do fiddle the numbers a lot each year but in different directions and so the net is minimal.