Germany surpasses Japan as third-largest economy

[President Johnson]

https://twitter.com/AFP/status/1757968277827985453

[jaichind]

This is mostly a function of the relative monetary cycle of the Fed, BOJ, and ECB.    In real terms, Japan's GDP is clearly ahead of Germany. Of course, India is clearly #3.



You can see this (even though this is 2022 data) in energy usage comparison between Germany and Japan

[ηєω ƒяσηтιєя]

I'm sorry but besides a large population, what does India do or produce to have the 5th largest economy in the world? Or is it mainly just the large population?

[jaichind]

Fun fact: Due to super strong Yen, for a few days in July 1995 thr Japan GDP exceeded that of the USA.

[jaichind]

I'm sorry but besides a large population, what does India do or produce to have the 5th largest economy in the world? Or is it mainly just the large population?

Well, India has a very large agricultural sector given the large size of arable land plus its large population to feed.  The mining sector in India is fairly large and is the basis of its steel industry. India is the second largest producer of steel in the world, recently overtaking both Japan and USA.  India's retail sector is fairly large as well given its high population and growing income.

[President Punxsutawney Phil]

Fun fact: Due to super strong Yen, for a few days in July 1995 thr Japan GDP exceeded that of the USA.

I tried to find an internet article, any, talking about this. I did find this (series of things from the Keidenran) but no cigar.

[jaichind]

Fun fact: Due to super strong Yen, for a few days in July 1995 thr Japan GDP exceeded that of the USA.

I tried to find an internet article, any, talking about this. I did find this (series of things from the Keidenran) but no cigar.

It was only for a few days.  There were some financial articles that talked about this but I cannot find any electronic copies of them.  The average JPY rate in 1995 would still put Japan's nominal GDP behind the USA in 1995.

[President Punxsutawney Phil]

Fun fact: Due to super strong Yen, for a few days in July 1995 thr Japan GDP exceeded that of the USA.

I tried to find an internet article, any, talking about this. I did find this (series of things from the Keidenran) but no cigar.

It was only for a few days.  There were some financial articles that talked about this but I cannot find any electronic copies of them.  The average JPY rate in 1995 would still put Japan's nominal GDP behind the USA in 1995.

I wonder what people felt about it at the time.

[jaichind]

I wonder what people felt about it at the time.

From what I could gather it was viewed as an ironic joke in Japan.  In 1995 the economic situation in Japan was not good from an average person's point of view.   For the Japanese average Joe, the economy has been in decline since 1993 as the busting of the Japanese credit bubble of the late 1980s finally hits the average Joe. 

This is why I posted this "fun fact" to show that nominal GDP based on current exchange rates is a poor way to measure overall economic size.  PPP has problems of its own but it does not have absurd results like July 1995 Japan GDP numbers, even if it is for a few days.

[Agonized-Statism]

More a sign of Japanese decline than German rise, right?

[Bismarck]

More a sign of Japanese decline than German rise, right?

Correct. Both countries are in decline.

[President Johnson]

More a sign of Japanese decline than German rise, right?

Correct. Both countries are in decline.

I think there's a good chance Germany rebounds in the next few years. We're in the midst of a massive transformation towards renewable energies.

[Bismarck]

More a sign of Japanese decline than German rise, right?

Correct. Both countries are in decline.

I think there's a good chance Germany rebounds in the next few years. We're in the midst of a massive transformation towards renewable energies.

What good is renewable energy going to do when both workers and consumers are declining?

[jaichind]

More fun facts: 

1) Using nominal GDP comparisons at the market exchange rate in 2022 Japan's GDP was greater than Germany's.
2) Germany's 2023 real GDP growth -0.3%
3) Japan's 2023 real GDP growth 1.9%
4)  Using nominal GDP comparisons at the market exchange rate in 2023 Germany's GDP was greater than Japan's.

This bizarre mathematical conclusion is purely a function of currency rates which are mostly driven on which part of the monetary cycle each central bank is at

[Clarko95 📚💰📈]

Il sorpasso, Deutschland edition

[President Punxsutawney Phil]

I wonder what people felt about it at the time.

From what I could gather it was viewed as an ironic joke in Japan.  In 1995 the economic situation in Japan was not good from an average person's point of view.   For the Japanese average Joe, the economy has been in decline since 1993 as the busting of the Japanese credit bubble of the late 1980s finally hits the average Joe. 

This is why I posted this "fun fact" to show that nominal GDP based on current exchange rates is a poor way to measure overall economic size.  PPP has problems of its own but it does not have absurd results like July 1995 Japan GDP numbers, even if it is for a few days.

Makes sense.