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Ok, gdp by ppp is also googleable. So why are people saying its fake news. It's also quite a useful metric when you need to understand what, say, the Chinese mi

Ok, gdp by ppp is also googleable. So why are people saying its fake news. It's also quite a useful metric when you need to understand what, say, the Chinese military budget buys.

gruez 3y ago
>So why are people saying its fake news. It's "fake news" insofar as playing fast and loose with definitions. "GDP" without any qualifiers means nominal GDP, not PPP adjusted GDP. It'd be like claiming the unemployment rate is 6.7% (U-6 rate) when most people agree that "unemployment" refers to the U-3 rate, which currently sits at 3.6%.
- Retric 3y ago
  PPP doesn’t produce a different GDP number it’s a different approximation of the same thing. Few people complain about historic GDP in constant dollars which is really a PPP adjustment.
  - gruez 3y ago
    You can make the same argument about u-3 vs u-6 unemployment
    - Retric 3y ago
      Not really when people talk about GDP abstractly they generally mean PPP or some equivalent of it. It’s just we are often talking in our own currency so it only applies for inflation adjustments. Look at the GDP growth rate at the bottom of this page: https://www.macrotrends.net/countries/USA/united-states/gdp-gross-domestic-product https://www.macrotrends.net/countries/USA/united-states/gdp-... If you take year X * growth rate you don’t get next years number. IE: 20,460.47 in 2020 * 1.0595 = 21,677.87 but 2021 actually shows 23,315.08 showing a growth rate is calculated in constant dollars not nominal ones. Nowhere do they say they aren’t directly using the GDP figures on the page to calculate growth rates, it’s just assumed because that’s the way they are generally calculated.
- ZoomerCretin 3y ago
  Contrived example: US Produces 1,000 pounds of butter, sells at $1/unit China Produces 1,300 pounds of butter, sells at $0.7/unit Nominal: The US economy is bigger, because they produce more US dollars. PPP: The Chinese economy is bigger, because they produce more goods. It's obvious to me that PPP is the more accurate metric. PPP is the real metric of GDP. Nominal is the metric you get after you adjust for the market price in dollars. If the US dollar lost half of its value internationally, yet the US economy still produced the same quantity and quality of goods, did the US economy shrink by half? I think not.

Ok, gdp by ppp is also googleable. So why are people saying its fake news. It's also quite a useful metric when you need to understand what, say, the Chinese military budget buys.

gruez 3y ago

>So why are people saying its fake news. It's "fake news" insofar as playing fast and loose with definitions. "GDP" without any qualifiers means nominal GDP, not PPP adjusted GDP. It'd be like claiming the unemployment rate is 6.7% (U-6 rate) when most people agree that "unemployment" refers to the U-3 rate, which currently sits at 3.6%.

Retric 3y ago
PPP doesn’t produce a different GDP number it’s a different approximation of the same thing. Few people complain about historic GDP in constant dollars which is really a PPP adjustment.
- gruez 3y ago
  You can make the same argument about u-3 vs u-6 unemployment
  - Retric 3y ago
    Not really when people talk about GDP abstractly they generally mean PPP or some equivalent of it. It’s just we are often talking in our own currency so it only applies for inflation adjustments. Look at the GDP growth rate at the bottom of this page: https://www.macrotrends.net/countries/USA/united-states/gdp-gross-domestic-product https://www.macrotrends.net/countries/USA/united-states/gdp-... If you take year X * growth rate you don’t get next years number. IE: 20,460.47 in 2020 * 1.0595 = 21,677.87 but 2021 actually shows 23,315.08 showing a growth rate is calculated in constant dollars not nominal ones. Nowhere do they say they aren’t directly using the GDP figures on the page to calculate growth rates, it’s just assumed because that’s the way they are generally calculated.
ZoomerCretin 3y ago
Contrived example: US Produces 1,000 pounds of butter, sells at $1/unit China Produces 1,300 pounds of butter, sells at $0.7/unit Nominal: The US economy is bigger, because they produce more US dollars. PPP: The Chinese economy is bigger, because they produce more goods. It's obvious to me that PPP is the more accurate metric. PPP is the real metric of GDP. Nominal is the metric you get after you adjust for the market price in dollars. If the US dollar lost half of its value internationally, yet the US economy still produced the same quantity and quality of goods, did the US economy shrink by half? I think not.