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Old December 8th, 2016, 12:45 AM   #11

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Originally Posted by tomar View Post
PPP is a sham... Its much worse than GDP
Explain please.
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Old December 8th, 2016, 12:56 AM   #12
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Explain please.
Already been explained several times... But here we go again.

In summary, PPP is a multiplier applied to the GDP to reflect the alleged superior buying power in certain (poorer) countries.... This unfortunately has no relation to real life...

Just one example why it does not work, but there are many

PPP multiplier for Morocco is above 3..... Because moroccans supposedly have superior buying power.... This however applies only to a few locally made products such as agricultural products....

But take a Renault car.. There is a Renault factory in Morocco making the same cars as in France... Let's take a 20 000 euro car sold in France...
According to PPP that car should sell for less than 7 000 euros in Morocco... But it sells for the almost exact same 20 000 euros (give or take a few percent)... If you apply PPP then than car will magically contribute 60 000 euros to Morocco's PPP GDP instead of the real 20 000

I can multiply such examples at infinitum....

PPP is simply a fantasy figure
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Old December 8th, 2016, 01:31 AM   #13

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These are all economical measures with their proper usage. I think here the matter is more about not understanding their nature and their proper usage. Politicians in this have made a chaos using, politically, economical measures, indexes ...

Now, to make a comparison, if we evaluate two corporations the first thing we note is the global turnover.

Then we could wonder which is the mean turnover per employee.

Do these two measures tell us which is the life style of the employees of the two corporations?

No, the turnover tells us how a corporation is economically big, the turnover per employee is an important index of economic efficiency of the corporation. For any economical sectors there is a minimum suggested turnover per employee. Usually in the sector of the services the turnover per employee is well higher than in the sector of production in Western countries. This is also why we outsource production to countries where workers earn well less money than here.
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Old December 8th, 2016, 01:38 AM   #14

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In another thread I said many of the indexes are 'blunt instruments'. That includes GDP, GDP-per capita and HDI. I place lot of store though on fixed benchmarks - one that I think is good is the 'Headcount of people living below $1.90'.

World Bank records these at https://ourworldindata.org/world-poverty/ move the cursor over the country to get thre figure. Examples are -

Asia

Bangladesh 43%
India 21%
Indonesia 15.9%
Pakistan 8%


Africa

Madagascar 81%
DRC 77%
Mozambique 58%
Nigeria 50%

Since GDP is measure of declared productivity not actual productivity it can be wildly off target. However poor don't have reason to hide what they are living on. The fixed dollar headcount also tells us how fairly wealth is distributed.
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Old December 8th, 2016, 01:41 AM   #15
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The most annoying misconception probably is the market, or the "forces of the market". Some annoying derivatives thereof are theorems like workers are paid by their marginal productivity, or that greed is good.
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Old December 8th, 2016, 01:54 AM   #16

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There is pretty cool feature that allows you to select countries by % living belowing $1.90 and look at the pattern over time - https://ourworldindata.org/world-poverty/
Poverty benchmarks set up by countries vary wildly since governments have interest in hiding their incompetence but the fixed $1.90 does a good job of exposing or reflecting reality on the ground. Moldavia in Europe is not doing too well either although it has improved drasticaly over the last few years.

Click the image to open in full size.
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Old December 8th, 2016, 01:55 AM   #17
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Originally Posted by Bullit View Post
In another thread I said many of the indexes are 'blunt instruments'. That includes GDP, GDP-per capita and HDI. I place lot of store though on fixed benchmarks - one that I think is good is the 'Headcount of people living below $1.90'.

World Bank records these at https://ourworldindata.org/world-poverty/ move the cursor over the country to get thre figure. Examples are -

Asia

Bangladesh 43%
India 21%
Indonesia 15.9%
Pakistan 8%


Africa

Madagascar 81%
DRC 77%
Mozambique 58%
Nigeria 50%

Since GDP is measure of declared productivity not actual productivity it can be wildly off target. However poor don't have reason to hide what they are living on. The fixed dollar headcount also tells us how fairly wealth is distributed.
GDP is a measure of the product, or the volume of output, not productivity.
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Old December 8th, 2016, 02:04 AM   #18

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GDP is a measure of the product, or the volume of output, not productivity.
I thought product and productivity are the two sides of the same coin? The latter suggesting per unit value the former gross/aggregate?
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Old December 8th, 2016, 02:38 AM   #19
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I thought product and productivity are the two sides of the same coin? The latter suggesting per unit value the former gross/aggregate?
No, the other side of the coin in terms of GDP is GDI, i.e. gross domestic income. Productivity is the relationship between volume of output to the volume a particular input. As GDP is concerned, the usual productivity measure is GDP per hours worked. Other measures are GDP per individual in the labour force, GDP per full-time job equivalent, GDP per unit of capital investment, or GDP per unit of R&D spending.
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Old December 8th, 2016, 02:41 AM   #20

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Quote:
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I thought product and productivity are the two sides of the same coin? The latter suggesting per unit value the former gross/aggregate?
Usually a good productivity allows you to have the potentiality to obtain also a great global production. But it's not said. The global production of a country depends also and obviously on its demographic and productive dimensions [service and goods].
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