Re: Democrats destroying America ...

In article <KsOdnY9oQacn5LTbnZ2dnUVZ_hOdnZ2d@xxxxxxxxxxxxxxxxxxxxxxxx>, Bill Todd <billtodd@xxxxxxxxxxxxx> writes:
George Cook wrote:
In article <66SdnaJxH-gGA7XbnZ2dnUVZ_hGdnZ2d@xxxxxxxxxxxxxxxxxxxxxxxx>, Bill Todd <billtodd@xxxxxxxxxxxxx> writes:
George Cook wrote:

...

I am very interested in exactly where you got these figures.
No problem: they're from the reports generated at
http://www.imf.org/external/pubs/ft/weo/2007/01/data/weoselgr.aspx

I generated reports for GDP, current prices, U.S. dollars, then divided
the 2007 values by the 2001 values (to 3 or 4 significant figures) to
derive the percentages. I chose this particular measure because it best
matched the 38% U.S. GDP increase over 6 years that you cited and also
approximately matched the U.S. GDP figures from the OMB tables I had
used; it also seemed appropriate to use a common currency (the dollar)
to try to factor out differences based on varying exchange rates and
arrive at an apples-to-apples comparison.

Other report choices do indeed generate different figures, often
considerably less dramatic. I'll have to look more carefully to
understand why (e.g., whether the declining relative value of the dollar
over this period contributed to the higher differences when the dollar
was used as the basis, or whether differing relative inflation played an
undue part) and whether that would or would not make a different set of
reports more appropriate to use.

Bill, I honestly expected better from you. Perhaps my "waving the red
flag in front of the bull" stuff (e.g. "Pelosi and comrades" and "leftist
media") stimulated you more than I expected it would, so I will stop it.

While finding information on the Web late at night can make one less
than thorough in examining all alternatives, I don't yet see anything
that I need apologize for.

Whoa, you *actually* are an idiot. I had been giving you the benefit of
the doubt up until now.


Only a complete fool would believe for a minute that the numbers you
gave have any meaning economically.

Since I feel the same way about much of the drivel that you have posted,
I guess we'll just have to agree to disagree.

I knew they were crap the minute I
spotted them.

As I've already proved (using the OMB figures that you don't appear to
dispute) that many of yours were.

You proved nothing of the sort. You gave figures which supported my point,
while claiming they didn't because they came from the OMB and therefore
were bogus. So you either posted valid numbers which proved my point or
you posted bogus numbers which proved nothing. You simply can't have it
both ways. So which is it? Are the OMB deficit numbers valid or not?

Computing a country's GDP growth in any currency other
than it's own is virtually meaningless.

While it is *possible* that your statement is correct, I'm afraid that
you'll really have to do considerably more than simply assert it.

Do I have to get out the crayons and draw you a damn picture?

I explained why I normalized the numbers to the U.S. dollar: to factor
out differences in exchange-rate and relative inflation and attempt to
achieve an apples-to-apples comparison. Now you need to explain in
adequate detail why this is *not* an appropriate measure of relative
*real* comparative growth.

Moron, you can't normalize to U.S dollars that way because the value
of the dollar is not the same in each of the six years in relation to
the various national currencies. What you have is a donkey-to-rock
comparison. It is no where near an apples-to-apples comparison. An
apples-to-apples would be the calculations I did below using constant
prices. The previous calculations I did were an apples-to-oranges
comparison because they used current prices (i.e, the differing inflation
rates in each nation was not taken into account). Your way *DOES NOT*
take into account exchange-rate and relative inflation differences;
instead they cause radical distortions in the values. Your figures
would be radically different by varying amounts per nation if the exchange
rates for the USD had been significantly different during that period,
yet nothing actually would have chanced in regard to each nation's GDP
(actually if the exchange rates changed, then those changes might have
economic impacts on the various GDPs, but those changes would show up
in unpredictable ways in the GDP data (i.e, the distortions would simply
vary)).

Your normalizing concept is only valid for a single static point in time
such as when all countrys produce their annual GDP figure. The figures
can then be reasonably accurately converted to USD at the USD exchange
rates (I don't have the time now to investigate which exact exchange
rates are used (i.e., the current one, a median or average one for the GDP
time period, or some other method)).

But you simply cannot take a USD GDP converted using one exchange rate
and divide it by another USD GDP converted with some other exchange rate,
and expect to have a value with any useful meaning. If the exchange
rate varied only a little and you used "constant price" values, the
result might not be off that much, but you need to know what the exchange
rates were in order to determine if the results are even close.

Whether or not to use current
or constant prices is debatable,

Indeed, but since the figure that you presented for comparison used
current prices, so did mine.

No objection to your use of "current prices" given that it is what I
was using, however it did make your results even more radically wrong
given what you attempted to do.

God, I didn't think I'd have to resort to actually compounding the annual
GDP percentages, but you appear to share some genes with boob.

The annual IMF GDP percentages are only available in constant dollars,
so I need to use that for these calculations.

--France (values in French currency) --

France GDP for 2001 = 1,469
Multiply that by the 2002 1.1% increase gives 16.
1,469 + 16 gives 1,485 for 2002.
Multiply that by the 2003 1.1% increase gives 16.
1,485 + 16 gives 1,501 for 2003.
Multiply that by the 2004 2.0% increase gives 30.
1,501 + 30 gives 1,531 for 2004.
Multiply that by the 2005 1.2% increase gives 18.
1,531 + 18 gives 1,549 for 2005.
Multiply that by the 2006 2.0% increase gives 31.
1,549 + 31 gives 1,580 for 2006.
Multiply that by the 2007 2.0% increase gives 32.
1,580 + 32 gives 1,612 for the 2007 GDP.

The IMF stated value for 2007 is 1,613.653 which would match my computed
value if the percentages hadn't been rounded to one place and if I hadn't
rounded to four digits.

Dividing 2001's 1,469 into my compounded 2007 value of 1,612 gives 9.7%
for the six year period.

Dividing 2001's 1,469 into the IMF 2007 value of 1,614 gives 9.9% for
the six year period.

This shows that my compounded value matches (taking into account rounding)
the value computed by simply dividing 2007 by 2001.

Now, Bill, you either accept the IMF's GDP annual percentages as correct
or not. If not, then there is little point in trying to educate someone
who is unwilling to be taught, and it's just a waste of my time to
continue.

Then, Bill, if you accept that my compounded value is correct (I'm
not going to keep repeating "excepting for rounding errors"), you have
to accept that 9.9% would be the IMF's published (if they did so) GDP
growth percentage for France for the period of 2001-2007.

Given that the IMF used constant prices to compute their GDP percentages,
let's do the same:

2001-2007 GDP change using constant prices
Australia 20.3%
Canada 17.2%
China 77.6%
France 9.9%
Germany 6.5%
Hong Kong 38.2% (Apparently had a period of deflation)
India 55.8%
Italy 5.5%
Japan 11.3% (Deflation also)
Russia 45.4% (Inflation must be pretty high)
UK 16.5%
US 17.9%

Based on the IMF data, these are the most relevant 2001 to 2007 GDP
growth figures for comparison purposes. They are sometimes called
"real" GDP growth rates.

Now for the part you seem to be getting stuck on. The USD was not
used in any of these calculations (excepting the US of course). Note
that the relative values have changed enormously from my previous
"current price" calculations (see below) because each nation's inflation
is now factored out. Exchange rates are not a factor at all.

2001-2007 GDP change using current prices
Australia 49%
Canada 35%
China 115%
France 23%
Germany 12%
Hong Kong 21%
India 101%
Italy 23%
Japan 4%
Russia 238%
UK 36%
US 36%

In any case, I believe both sets of figures speak for themselves as to
the health of the US econony.

I am still confused as to why you think using the USD in computing the
domestic growth rate of another nation would be of any value whatsoever.
The USD is great for comparing the relative sizes of GDPs, but it has
no place in computing a GDP other than in the US. I mean, you cannot
possibly think (can you?) that France uses the USD to compute its GDP?

Perhaps your understanding of GDP needs work. Wikipedia says:

The GDP of a country is defined as the market value of all final goods
and services produced within a country in a given period of time. It is
also considered the sum of value added at every stage of production of
all final goods and services produced within a country in a given period
of time.

These GDP values are only possible to compute using the currency of the
country, given that everything in the country is valued in that currency.
Only after the GDP values are computed can the USD exchange rate be applied
to give the GDP in USD. By using a constant value for its currency a
country can compute a GDP with inflation factored out.

Even after writing all of the above, I am still trying to figure out why
you thought the USD had any relation at all to other nations' internal
growth rates. I am at a lost. You want me to explain "why not" without
there even being a "why". You are asking me to prove something which is
prima facie.


George Cook
.

Relevant Pages

  • Re: Democrats destroying America ...
    ... would be radically different by varying amounts per nation if the exchange ... yet nothing actually would have chanced in regard to each nation's GDP ... the exact same "arbitrary" value based on the USD for the ten years prior ... for the 43 currencies which currently have fixed exchange rates. ...
    (comp.os.vms)
  • Re: Democrats destroying America ...
    ... I generated reports for GDP, current prices, U.S. dollars, then divided ... Russia 238% market economy can do wonders) ...
    (comp.os.vms)
  • Re: Betcha didnt know this.
    ... See that the GDP has now contracted ... a tremendous drop in the GDP number since the democrats took over ... or was it perhaps the oil prices that made people unable to make their ...
    (soc.senior.issues)
  • Re: residential land rent vs GDP: Shillers buddy vs Shiller
    ... has studied U.S. house prices going ... Over the long run, he says, home prices tend to increase ... Since real per capital income growth can be taken as a proxy for real GDP ... claimed to pace per capita income, while increasing from two or three ...
    (sci.econ)
  • Re: One world - one price
    ... exchange rate parity would imply. ... Is it Ok to compare GDP per Capita John? ... GDP per capita has nothing to do with it. ... compare the per-capita GDP of Argentina and USA and then compare the exchange-rate-adjusted prices ...
    (borland.public.delphi.non-technical)