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GDP is an inaccurate measure since it's really comparing wealth of nations and not total number of economic activity in nations. This metric massively skews eco
by nine_zeros 6y ago
GDP is an inaccurate measure since it's really comparing wealth of nations and not total number of economic activity in nations. This metric massively skews economic activity due to currency conversion.
This can be easily deducted from population. More population == more haircuts overall. There is no way the US is getting more haircuts than China or India.
GDP (PPP) is a much better metric for economic activity overall. In this China has the US beat and India is third. Makes sense with so much population.
- SpicyLemonZest 6y agoSure, but by the haircut metric, it's inevitable that most economic activity will take place on the continent where most people live. There's no economic policy the US could pursue to prevent that, even if for some amoral reason they wanted to.
- nine_zeros 6y agoPrevention is the wrong approach in the first place. The only thing US can do is maintain a technological lead. Without technological lead, the US is much like Brazil, which is a middling nation with lots of natural resources.
- nickthemagicman 6y agoThat's a fascinating measure. Thanks for sharing that. I didn't even know about that. It would seem that our currency is overvalued then if our true output is skewed by our currency exchange rates? How does that reconcile?
- nine_zeros 6y agoBecause the demand for dollars is 7 billion people + entities vs demand for say Chinese yuan is 1.4 billion people + chinese entities only. Basic supply and demand. If demand for US dollar reduces (say all Asian countries band together like EU to form a megacurrency), they will stop keeping too many dollars in reserve and demand will drop, thus currency value will drop and the US will drop in GDP rankings.
- nickthemagicman 6y agoThat's fascinating. Thank you for the info! Have been digging deeper into this.