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GDP (PPP) which is arguably a more meaningful metric for comparison. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki

GDP (PPP) which is arguably a more meaningful metric for comparison. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

ben_w 2y ago
For a lot of things, yes; but — genuine Q because I'm not economically trained — on the question of dollar dominance in international trade… is PPP genuinely more relevant than nominal? I mean, this does seem to be a question about the currency itself? Or should the question draw the boundary differently, and be asking about the size of the dollar economy rather than the US economy, with e.g. all international trade that is denominated in USD being counted?
- olalonde 2y ago
  Suppose China and the U.S. each produce 10 tons of steel. GDP PPP would consider both economies equally sized (and they arguably are), but nominal GDP would favor the U.S. because steel costs more there. GDP PPP is more useful if you want to compare standards of living or consider consider a country's ability to sustain a war for example.
  - ben_w 2y ago
    That's the positive argument for PPP that I'm already aware of. Thing is, to quote @YZF a way up chain: "There is no quick decoupling from the USD." — I'm curious about the dollar itself in this case, rather than about the goods.
audunw 2y ago
No, it’s not. It’s just a different perspective. In some aspects it does reveals real economic power, but in other ways it can vastly exaggerate a country’s economic power. Having hundreds of millions of poor near-subsistence farmers will add quite a lot to a country’s GDP (PPP), but does not make that country more powerful on the international stage. I’d argue that PPP is more misleading than meaningful.you Like, you can get an apartment built really cheaply in China. Yes, your money goes further there. But there’s also a much higher risk that the building is very low quality and will fall apart in a short time. And what’s more, you’re not actually buying and fully owning it. The land is leased from the government
- olalonde 2y ago
  > Having hundreds of millions of poor near-subsistence farmers will add quite a lot to a country’s GDP (PPP) In what sense? By definition, subsistence farmers primarily produce for their own consumption rather than for the market, meaning their output is largely not captured in official GDP statistics.
  - IAmBroom 2y ago
    Which argues that all metrics are useless, not that GPD (PPP) is best.

GDP (PPP) which is arguably a more meaningful metric for comparison. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

ben_w 2y ago

For a lot of things, yes; but — genuine Q because I'm not economically trained — on the question of dollar dominance in international trade… is PPP genuinely more relevant than nominal? I mean, this does seem to be a question about the currency itself? Or should the question draw the boundary differently, and be asking about the size of the dollar economy rather than the US economy, with e.g. all international trade that is denominated in USD being counted?

olalonde 2y ago
Suppose China and the U.S. each produce 10 tons of steel. GDP PPP would consider both economies equally sized (and they arguably are), but nominal GDP would favor the U.S. because steel costs more there. GDP PPP is more useful if you want to compare standards of living or consider consider a country's ability to sustain a war for example.
- ben_w 2y ago
  That's the positive argument for PPP that I'm already aware of. Thing is, to quote @YZF a way up chain: "There is no quick decoupling from the USD." — I'm curious about the dollar itself in this case, rather than about the goods.

audunw 2y ago

No, it’s not. It’s just a different perspective. In some aspects it does reveals real economic power, but in other ways it can vastly exaggerate a country’s economic power. Having hundreds of millions of poor near-subsistence farmers will add quite a lot to a country’s GDP (PPP), but does not make that country more powerful on the international stage. I’d argue that PPP is more misleading than meaningful.you Like, you can get an apartment built really cheaply in China. Yes, your money goes further there. But there’s also a much higher risk that the building is very low quality and will fall apart in a short time. And what’s more, you’re not actually buying and fully owning it. The land is leased from the government

olalonde 2y ago
> Having hundreds of millions of poor near-subsistence farmers will add quite a lot to a country’s GDP (PPP) In what sense? By definition, subsistence farmers primarily produce for their own consumption rather than for the market, meaning their output is largely not captured in official GDP statistics.
- IAmBroom 2y ago
  Which argues that all metrics are useless, not that GPD (PPP) is best.