4 ms·

Simply PPP vs nominal.

gruez 3y ago
But in this case nominal vs PPP GDP are both in use. I don't see how "economists" are "redefining" things. It sounds more like OP is seeing "GDP" in separate articles, thinking they're the same thing, and then thinking there's some sort of conspiracy to mislead when he figures out they're in fact different. edit: I did some searching and found a economist article that claimed china's economy would exceed the US's in 2018: https://www.economist.com/finance-and-economics/2011/12/31/how-to-get-a-date https://www.economist.com/finance-and-economics/2011/12/31/h... The article very clearly says that 2018 is the date where its GDP at market rates will exceed the US. So at least for this article, there's no mixups here, only a failed prediction.
seanmcdirmid 3y ago
PPP is a weird measure since a lot of things are even more expensive in China than the USA. Unless you are just eating out and taking taxis, your higher PPP isn’t going to help you much.
- Aunche 3y ago
  Rent helps a lot when it comes to PPP. Also, services like healthcare, plumbing, education, etc
  - seanmcdirmid 3y ago
    Buying a house is more expensive even if rents are cheaper (well, they are still in a big property bubble). Service in general are cheaper, but anything imported will be same or more expensive (obviously, since USD is being used to buy those). Cars were generally more expensive, and luxury cars still are, but low to mid end cars are about the same now. China has high taxes on luxury goods, and what is considered a luxury good is pretty strange (eg Levi jeans for 800RMB).
    - prewett 3y ago
      > what is considered a luxury good is pretty strange Considering a tasty Western meal in Beijing was about 100 RMB, a nice Chinese meal about 50-75 RMB per person, and Peking duck at a fancy place was 250 RMB, I’d say a pair of jeans for 600 RMB is fairly luxury. Especially since Levi’s in the US only cost 1-2 normal meals. (This was about 2012, not sure how inflation has been) But then, I’d also say that a $100 pair of jeans is also luxury in the US. (And a poor deal if they’re already fashionably pre-shredded)
    - Aunche 3y ago
      Buying a home is an asset. It's not something that you directly consume. You can sell it or borrow against it. Something being more expensive due to taxes doesn't affect PPP because that money is being used for government services.
soligern 3y ago
If you use PPP that would make India the 3rd largest economy and they have a ways to go before they can be considered developed.
- anovikov 3y ago
  Yet it is 3rd largest indeed, if you want to compare per capita levels just divide by population but then completely unexpected countries (as well as a few expected like Switzerland), come out on top.
  - soligern 3y ago
    It’s not really unexpected. It’s mostly the oil rich middle eastern countries and a few of the tiny European ones like Luxembourg and Switzerland. That has nothing to do with PPP thought which is a measure of how inexpensive things are in a country relative to one another.
nonethewiser 3y ago
PPP was never the standard definition for GDP.

But in this case nominal vs PPP GDP are both in use. I don't see how "economists" are "redefining" things. It sounds more like OP is seeing "GDP" in separate articles, thinking they're the same thing, and then thinking there's some sort of conspiracy to mislead when he figures out they're in fact different. edit: I did some searching and found a economist article that claimed china's economy would exceed the US's in 2018: https://www.economist.com/finance-and-economics/2011/12/31/how-to-get-a-date https://www.economist.com/finance-and-economics/2011/12/31/h... The article very clearly says that 2018 is the date where its GDP at market rates will exceed the US. So at least for this article, there's no mixups here, only a failed prediction.

seanmcdirmid 3y ago

PPP is a weird measure since a lot of things are even more expensive in China than the USA. Unless you are just eating out and taking taxis, your higher PPP isn’t going to help you much.

Aunche 3y ago
Rent helps a lot when it comes to PPP. Also, services like healthcare, plumbing, education, etc
- seanmcdirmid 3y ago
  Buying a house is more expensive even if rents are cheaper (well, they are still in a big property bubble). Service in general are cheaper, but anything imported will be same or more expensive (obviously, since USD is being used to buy those). Cars were generally more expensive, and luxury cars still are, but low to mid end cars are about the same now. China has high taxes on luxury goods, and what is considered a luxury good is pretty strange (eg Levi jeans for 800RMB).
  - prewett 3y ago
    > what is considered a luxury good is pretty strange Considering a tasty Western meal in Beijing was about 100 RMB, a nice Chinese meal about 50-75 RMB per person, and Peking duck at a fancy place was 250 RMB, I’d say a pair of jeans for 600 RMB is fairly luxury. Especially since Levi’s in the US only cost 1-2 normal meals. (This was about 2012, not sure how inflation has been) But then, I’d also say that a $100 pair of jeans is also luxury in the US. (And a poor deal if they’re already fashionably pre-shredded)
  - Aunche 3y ago
    Buying a home is an asset. It's not something that you directly consume. You can sell it or borrow against it. Something being more expensive due to taxes doesn't affect PPP because that money is being used for government services.

soligern 3y ago

If you use PPP that would make India the 3rd largest economy and they have a ways to go before they can be considered developed.

anovikov 3y ago
Yet it is 3rd largest indeed, if you want to compare per capita levels just divide by population but then completely unexpected countries (as well as a few expected like Switzerland), come out on top.
- soligern 3y ago
  It’s not really unexpected. It’s mostly the oil rich middle eastern countries and a few of the tiny European ones like Luxembourg and Switzerland. That has nothing to do with PPP thought which is a measure of how inexpensive things are in a country relative to one another.

nonethewiser 3y ago

PPP was never the standard definition for GDP.