[Serious] When will China exceed the US in aggregate nominal GDP?

[KrazyHorse]

We were discussing the question that is the title of the thread, but now we're probably going to start laughing about what a ****** you are.

Already there...

[KrazyHorse]

Oh and ****face Drake, GDP can be in nominal terms but adjusted for PPP. Nominal vs real indicates there has been a correction for inflation.

You ****ing moron, when you are talking about cross-country comparisons (when will China have higher GDP than the US) it indicates whether or not you've adjusted for purchasing power across countries (PPP). When you are talking about cross-time comparisons (when will the US have twice the GDP it does today) it indicates whether or not you've adjusted for purchasing power across times (CPI).

[dannubis]

OK, probably talking to a brick wall here but

PPP in nominal dollar terms => nominal GDP adjusted for PPP

PPP in real dollar terms => real GDP adjusted GDP for PPP

So besides kicking in an open door, what have you done exactely? Dickface.

[Egbert]

1. dannubis is correct
2. dannubis wastes time talking to a brick wall

[KrazyHorse]

OK, probably talking to a brick wall here but

PPP in nominal dollar terms => nominal GDP adjusted for PPP

PPP in real dollar terms => real GDP adjusted GDP for PPP

Is this some kind of a joke?

[KrazyHorse]

Danubes, when you say something stupid just admit it...

[KrazyHorse]

Now, if we were discussing the question "when will China have higher GDP than the US does today" we would have to be a little more careful. And because the baskets for calculating PPP and CPI are not guaranteed to generate consistent answers, it matters in which direction we close the FX triangle.

Which, my little eurocom, does not explain your utter lack of comprehension when it comes to the simple relationship between nominal exchange rates and PPP rates, and why this is an orthogonal question to the relationship between nominal and real growth rates of countries...

[dannubis]

Now, if we were discussing the question "when will China have higher GDP than the US does today" we would have to be a little more careful. And because the baskets for calculating PPP and CPI are not guaranteed to generate consistent answers, it matters in which direction we close the FX triangle.

Duh? So? Where did I claim something different?

All I am saying is that PPP does not have to include CPI for the dollar.

And I am not taking about growth rates you daft person. In know that PPP has only marginal impact on growth rates. I am talking about determining the level at which China will start to slow down if they follow the same path as the Japanese or the Koreans did.

[Elok]

This economics smack-talk would probably be awesome if I had any clue what it all meant.

[KrazyHorse]

This economics smack-talk would probably be awesome if danny-boy had any clue what it all meant.

FTFY

[KrazyHorse]

Duh? So? Where did I claim something different?

All I am saying is that PPP does not have to include CPI for the dollar.

Holy ****, you ****ing dullard.

Set PPP_US(t) = 1 for all t

Express GDP_US and GDP_CN in native current currency (US in current USD, CN in current CNY), i.e. GDP_US(t+1)/GDP_US(t) - 1 gives you the nominal increase in US GDP from t to t+1. Let (CNY/USD)(t) be the exchange rate value of 1CNY in USD at time t

When I ask the question "when will China exceed the US in aggregate GDP" I can be asking for one of two things:

1) What t will make it so that GDP_US(t) = GDP_CN(t) * (CNY/USD)(t) ("nominal GDP")
2) What t will make it so that GDP_US(t) = GDP_CN(t) * PPP_CN(t) ("real GDP")

Now, neither one involves the CPI of either country. You can introduce a dependence on CPI by asking the following question:

2a) What t will make it so that GDP_US(t) * CPI_US(0)/CPI_US(t) = GDP_CN(t) * PPP_CN(0) * CPI_CN(0)/CPI_CN(t)

The extent to which this differs from (2) is the extent by which the FX triangle:

PPP_CN(t) = PPP_CN(0) * (CPI_CN(0)/CPI_CN(t)) * (CPI_US(t)/CPI_US(0))

doesn't tie out (due to differences in the baskets which go into PPP_CN, CPI_CN and CPI_US). In any event, this has nothing to do with comparisons of nominal GDP (thread title, calculated by (2))

Good ****ing Lord.

EDIT: Should have been (2a) and compared to (2).

[dannubis]

Again, I am not ****ing disagreeing with you on your calculation, you twit. I know how it is done. Thanks for kicking in an open door yet again.

Your line 2) gives you nominal GDP adjusted for PPP. It is the same as real GDP if you use USD in real terms for base year t.

Alpie said that from a GDP of about XX/cap he saw a slowdown for Japan some 20 years ago. China is close to this number so China should slow down.
In order to say something usefull on this you have to apply both PPP and CPI of the dollar to the XX. Not 100 % correct because of your 1a, I know, but good enough for practical use.

[Traianvs]

I'm surprised nobody has brought up the growth dilemma in this discussion, particularly since it's vital when talking about Cihnese growth (as well as Indian, Brazilian,...).

Foregoing the numbers for now (due to a lack of time), there's simply no way for our planet to sustain a China having a larger aggregate GDP than the US. Taking into account that other developing nations such as the other BRIC countries (which may lag behind a bit) as well as Egypt, Eastern-Europe and a host of other countries are also pushing their growth, in a 'business as usual'-scenario it's literally impossible to provide the resources in order to keep the process going.

Not only resources, but the same thing applies for ecological damage, climate warming and the lot. Even decoupling won't help. For instance, we'll need to subtract carbon from our athmosphere if we want to continue growth from 2100 onwards (shoiuld we decide to prevent the worst effects of climate change that is). There's no technological advance (enabling better productivity) conceivable that can do that.

All this talk of growth and GDP is so passé

[MOBIUS]

Exactly right. We are bobbling along at just under this planet's growth glass ceiling as it is. Also, once we achieve that glass ceiling, we'll find it will come crashing down - taking us with it.

Not long now...

[Traianvs]

I used to put the blame on the babyboomers. I now come to realize we're all accomplices. The average bastard of my generation still believes in the happy career story in which they get a company car and everything's okay as long as they're earning good money.

Worst of it all: they're not even happy about their lives.