PRC GDP/capita in 2012 at the Prefecture level (user search)
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  PRC GDP/capita in 2012 at the Prefecture level (search mode)
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Author Topic: PRC GDP/capita in 2012 at the Prefecture level  (Read 12998 times)
Beet
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« on: November 20, 2013, 10:29:18 PM »

PPP measures quantities. Nominal GDP measures prices. Unfortunately, you can't consume prices. I see this as similar to the gold standard/fiat currency dispute. On one hand you have an artificial measure of value, on the other hand you (have an attempt to) measure real value. It's unsurprising that nominal GDP leads to some truly absurd results, such as 4/5 of the Indonesian economy disappearing in 1998. I mean, it's true they had a crisis and all but... that's extremely unrealistic.
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Beet
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Posts: 29,029


« Reply #1 on: April 30, 2014, 11:55:22 PM »

PPP comparisons are useless. You can't adjust the price of international inputs- imported machinery or a ticket from San Francisco to Beijing, particularly in an export-oriented economy, the utility of PPP comparisons is virtually nil. The Chinese economy remains about half the size of the American.

Imports are never counted anyway in GDP- they subtract from it. And internationally traded goods are not price-adjusted for PPP calculations anyhow. That's a common mistake people make when critiquing PPP adjustments. Price index deviations are solely result of weighted non-tradable goods surveyed at different prices.
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