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Come back, we were just measuring GDP wrong!

Written By: - Date published: 12:34 pm, March 28th, 2012 - 10 comments
Categories: dpf, Economy, spin - Tags:

100 jobs a day were lost in January and 1000 people a week left New Zealand for Australia last year but it turns out it was all a mistake! David Farrar has discovered that we measure GDP slightly differently from Australia and if we use their measure then the purchasing power parity-adjusted difference in GDP per capita is close to zero. Hooray!

Now, all we need is for Farrar to work out that, actually, the minimum wage in Australia isn’t 50% higher than here, the unemployment rate isn’t lower (for the first time in decades) than here, the share of GDP that goes to workers isn’t 10% lower here, that the average wage gap isn’t $140 a week, and a labourer in Sydney doesn’t get twice what they do here.

Then the 600,000 Kiwis in Australia will realise they’ve been wrong all along and come back. Shit, I hope we have room for them all.

Might have to pull out the fold-out bed in the living room.

10 comments on “Come back, we were just measuring GDP wrong! ”

  1. Tom Gould 1

    And they measure girth differently, too, which technically makes Gerry a swimsuit model.

  2. Foreign Waka 2

    Damned Lies and Statistics. The facts speak for themselves.

  3. Georgy 3

    43% of all statistics are worthless !

  4. fender 4

    Good ol’ Farrar giving his 10% worth towards the failing Key promise of catching Aus. The sausage rolls will be 10% bigger in his brighter future. Bollard might get a 10% payrise for producing his report Farrar quotes from. Apparently we are now only 20% behind Aus GDP per capita and that explains why there’s people dancing on the brighter future streets.

    • Tc 4.1

      ‘ failing Key promise of catching Aus.’ you have to attempt something to fail at it, this is something Key and the hollowmen had no intention of attempting, just another lie to snare the sheeple with at the booths.

  5. Randle 5

    Does anyone know what tricks NZ uses to inflate GDP if any? The US employs hedonics and imputations to inflate their GDP by roughly 3 trillion. Chris Martenson explains:

    “Gross Domestic Product, or GDP, is how we tell ourselves that our economy is either doing well or doing poorly. In theory, the GDP is the sum total of all value-added transactions within our country in any given year.

    Here’s an example, though, of how far from reality GDP has strayed. The reported number for 2003 was a GDP of $11 trillion, implying that $11 trillion of money-based, value-added economic transactions had occurred.

    However, nothing of the sort happened.

    First, that 11 trillion included $1.6 trillion of imputations, where it was assumed that economic value had been created but no actual transactions took place.

    The largest of these imputations was the “value” that the owner of a house receives by not having to pay themselves rent. Get that? If you own your house free and clear, the government adds how much they think you should be paying yourself rent to live there and adds that amount to the GDP.

    Another is the benefit you receive from the “free checking” provided by your bank, which is imputed to have a value, because if it weren’t free, then you’d have to pay for it. So that value is guesstimated and added to the GDP as well. Together, just these two imputations add up to over a trillion dollars of our reported GDP.

    Next, the GDP has many elements that are hedonically adjusted. For instance, computers are hedonically adjusted to account for the idea that, because they are faster and more feature-rich than in past years, they must be more additive to our economic output.

    So if a thousand dollar computer were sold, it would be recorded as contributing more than a thousand dollars to the GDP. Of course, that extra money is fictitious, in the sense that it never traded hands and doesn’t exist.”

    http://www.chrismartenson.com/crashcourse/chapter-16-fuzzy-numbers

    • Colonial Viper 5.1

      Agree. It’s all a dodge to maintain the illusion of business (growth) as usual.

      Now if a fraction of the GDP numbers are actually simply scaled, and another fraction simply subtractive from society (like say, money spent building prisons or money spent knocking down wrecked Christchurch buildings), a large part of GDP is based on accruing debt based money and spending it, plus our population is growing (which tends to reduce our GDP per capita)…then I’d say we haven’t had any real economic growth for a very long time.

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