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Satellite Data Strongly Suggests That China, Russia and Other Authoritarian Countries Are Fudging Their GDP Reports (washingtonpost.com)
Christopher Ingraham, writing for The Washington Post: China, Russia and other authoritarian countries inflate their official GDP figures by anywhere from 15 to 30 percent in a given year, according to a new analysis of a quarter-century of satellite data. The working paper, by Luis R. Martinez of the University of Chicago, also found that authoritarian regimes are especially likely to artificially boost their gross domestic product numbers in the years before elections, and that the differences in GDP reporting between authoritarian and non-authoritarian countries can't be explained by structural factors, such as urbanization, composition of the economy or access to electricity. Martinez's findings are derived from a novel data source: satellite imagery that tracks changes in the level of nighttime lighting within and between countries over time.
Real GDP is the net of domestic output minus price changes, ie inflation. Look into how our inflation measurements have been contorted over the years and you'll see how it's "grossly" under-reported, thus GDP is overstated.
If you really believe China's GDP numbers have been that hilarious 7% growth for the past few years, I have a presidency to sell you.
Sincerely, /sar
Russia
The US has as well ever since it made financial entity transactions part of GDP, something no other nation does.
Tell that to someone who grew up in the USSR or GDR -- and try to keep a straight face. It's certainly a cause for concern here and getting worse; but no - we're no where NEAR a true authoritarian regime.
I read the introduction of the working paper. As someone with PhD, I have to call this research to be pure bullshit. If modern economists are as what this researcher, then I will call modern economics to be full of bullshit as well.
From the working paper, here is the main methodology..
" I study whether the mapping of night lights to GDP differs systematically by regime type. That is to say, I examine whether the same amount of growth in nighttime light translates into more GDP growth in autocracies than in democracies"
This methodology does not make sense for obvious reasons and non-obvious reasons. GDP is NOT night time light volume. A city with street lights but no people do not produce GDP. On the other hand, a factory that only works in the daytime, like in industrialized countries such as western europe and east China, do not have light volume at night. I cannot believe this bullshit research gets publicized by Bezos' fake news Washington Post. Maybe these news reporters deserve to starve and their newspapers shut down due to their inability to notice fake research?
North Korea wishes to point out its superiority in cloaking devices.
They only appear to be in the dark.
nothing was getting better. That's why we turned to a populist (Trump). Sadly so far I don't think it's turned out the way we'd hoped. Our populist put the same Goldman Sach's folks in charge that have run the show since Reagan and now he support's TPP & increases to guest worker programs. His tax cuts expire on us in 10 years but not on the 1%ers. Oh, and the $1 trillion in debt from those tax cuts is already being used as ammo to shoot down Medicare & Social Security, so we're fucked when we got old.
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Heinlein was calling them on it (although he probably overstated his case) fifty years ago in "Pravda means Truth" (which you can find in Expanded Universe or the earlier The Worlds of Robert A. Heinlein)
China, Russia and other authoritarian countries inflate their official GDP figures by anywhere from 15 to 30 percent in a given year, according to a new analysis of a quarter-century of satellite data.
This is nothing new. When I was getting my graduate degrees (one of which is in business) 15 years ago it was widely understood that China fudged their official numbers as a matter of routine. No real reason to believe this has changed. Economists who study this stuff are well aware that the numbers out of certain countries are unreliable and they make efforts to correct for the problem to the best of their ability.
In the 1960s, Robert Heinlein went to the Soviet Union as part of an opening salvo of goodwill between the countries. He looked at the shipping and roads in and out of Moscow and realized there was no way it could support whatever X millions of people they were claiming to he on rough parity with New York.
It's been estimated it required about 50% of Soviet GDP to even maintain a facade of parity with the US military.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
Authoritarian regimes lie more than democracies.
GDP is NOT night time light volume.
Of course not. But it is a rough proxy for GDP. Why would it systematically differ between authoritarian and non-authoritarian countries? An obvious answer is data fudging.
A city with street lights but no people do not produce GDP. On the other hand, a factory that only works in the daytime
Why would these differ between authoritarian and non-authoritarian countries?
China is known for "ghost cities", but they were never really that common, many of them are now occupied, and they would lead to under reporting of GDP, not the over reporting actually observed.
It's obviously not a perfect measure of GDP, but actually people have done the research and shown a strong link between the two. If, as you claim, you have a PhD (and it's in a relevant field: sorry, an English PhD gives you zero qualifications here), you're not only free, but should have the capability to put out your own research disproving this work. Of course, given the quality of logic in your post, I suspect you don't have that capability. For example:
A city with street lights but no people do not produce GDP.
The entire point of both a city and street lights is to have people. It's true that China has been building "ghost cities, but all that does is suggest that in fact the light-based estimate overestimates economic activity, which just makes the point in TFA that much stronger.
On the other hand, a factory that only works in the daytime, like in industrialized countries such as western europe and east China, do not have light volume at night.
Have you seen a factory at night before? Or even seen a factory in a movie at night? Most of them absolutely put out light at night (they're usually glittering beacons of light, in fact). In fact if they have smokestacks or chimneys they're required to or they're a huge safety risk to aircraft. Also lots (most?) factories in most climates run in mornings and evenings before/after sunrise, and it's not uncommon for them to run overnight: downtime is a huge waste of money when you have an expensive factory. In fact, factories not running overnight would be an indicator of economic weakness, such as happened to the US auto industry in the 2000s.
"None can love freedom heartily, but good men; the rest love not freedom, but license." --John Milton
Finance 501 taught me that GDP is the money supply times the velocity of money
Your education is incomplete. There are multiple ways to calculate GDP and they use several of them for official numbers to ensure some amount of consistency. In principle each method should give (roughly) equal results though in practice it isn't always so easy. The Economist has a decent article on how it generally is calculated.
You are quite right: modern economics is little more than a huge pile of bullshit.
I'm sure you really believe that too even though that statement makes it clear you haven't actually studied economics and are substituting ideology for evidence.
That's mainly because its assertions cannot be tested, so no one knows whether what economists say is true.
That is not even remotely true for a wide array of economic research. They have testable models which are used all the time. Heck there is money to be made by making testable models - do you really think all the investment banks would spend so much money on quantitative analysis if it didn't provide actual results?
There's also a lot of truth and valuable ideas in Karl Marx,
Yeah you just shot yourself in the foot there if you think Marx is any sort of a refutation of modern economic research.
GDP is NOT night time light volume.
Of course not. But it is a rough proxy for GDP. Why would it systematically differ between authoritarian and non-authoritarian countries? An obvious answer is data fudging.
Data fudging, maybe. Cultural differences, developmental differences, and about 100 other factors are probably better proxies. The light pollution methodology IS bullshit. Especially when we are talking about small changes in GDP like 3-7% growth.
Just as one example, in the US a substantial source of light pollution is car sales lots, which are lit up like daytime 365 nights a year. Countries in Europe don't generally have as many lots- they often order their cars from the factory. In Japan, theft is rare and land is expensive so the lots are much smaller and aren't well lit at night. Similarly, the US is heavilly car-dependent and we have huge parking lots of department stores, malls, and grocery stores, many of which are lit up at night. Most other countries have more concentrated population centers and less suburban sprawl.
Additionally, many places are actively trying to reduce light pollution, and in some countries it is normal to shutter most businesses in the evening. Plus, in many developing countries the GDP growth may be concentrated in the top of the economic ladder, which is not very noticable from light pollution.
Unless the study corrected for factors like this (and they didn't) the correlation between GDP and light pollution is completely baloney.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
All governments lie, just about different things.
"I believe in Karma. That means I can do bad things to people all day long and I assume they deserve it." : Dogbert
When I was in the USSR, a Ukranian told me that he was just as free as I. He said I could go stand in front of the White House and yell, "George Bush is a fool!" with no recourse. He said he could also go stand in the middle of Red Square and shout, "George Bush is a fool!" with no recourse too.
That seems a strange value to focus on. I would think authoritarianism would be measured using domestic metrics rather than foreign policy ones. I mean how many foreign bases does N Korea have?