Europe's incomes outpaced the rest of the west in 1990-2002

[el freako]

I have recently done a study on relative incomes for most of the OECD with the primary emphasis being on studying income (as opposed to production which is used in GDP) and making the data as comparable as possible.

I chose the datum years of 1990 and 2002 as these are the earliest and latest set of EKS PPPs that I have for the region (prior to 1990 the OECD used GK PPPs which gave different results).

To correct for the effects of the differing economic cycle I adjusted the GDP using the OECD's estimates for the output gap.

And to convert from production to income I then added net property income from abroad (the main component of this is remitted profits and wages).

Here are the results, which were revealing:

Trend-adjusted Gross National Income relative to EU15 average, 2002 (1990)
Canada: +8% (+17%)
United States: +38% (+54%)

Australia: +4% (+8%)
Japan: +8% (+14%)
New Zealand: -22% (-12%)

Austria: +10% (+8%)
Belgium: +9% (+9%)
Denmark: +11% (+10%)
Finland: +4% (+2%)
France: +7% (+14%)
Germany: -1% (+3%)
Greece: -30% (-37%)
Ireland: -2% (-32%)
Italy: -2% (+3%)
Netherlands: +10% (+6%)
Norway: +37% (+19%)
Portugal: -30% (-39%)
Spain: -16% (-25%)
Sweden: +5% (+11%)
Switzerland: +27% (+41%)
United Kingdom: +10% (+3%)

So, for example, Canada shows as +8% (+17%) that means that it had an income 8% above the EU15 average in 2002 but it was 17% higher in 1990 - meaning that it grew slower than the EU15 average, whilst Spain was -16% (-25%) meaning that it was 16% below the EU15 average in 2002 and was 25% below it in 1990 - meaning that it grew faster than the EU15 average.

As you can see many poorer members of the EU15 caught up significantly with the average, whilst every non-european state saw a fall relative to that average.
What was even more surprising is that the US's total income fell from 5.6% above the EU15 level in 1990 to 5.0% above in 2002, indeed only Australia saw a rise in it's relative total income compared to the EU15, a rise which was more than countered by faster population growth.


edit: added explaination of figures at VJ's suggestion

[chequita guevara]

[el freako]

Sorry, is the data confusing?

How can I make it more user-friendly?

[chequita guevara]

I have no idea what the numbers mean. Or the acronyms.

Plus, I look at this United States: +38% (+54%) and at a glance, I'd think it means that the USA is doing quite well against Europe.

[Eli]

edit: never mind, I confused the order of the numbers.

[Flandrien]

Re: Europe's incomes outpaced the rest of the west in 1990-2002

Originally posted by el freako
Belgium: +9% (+9%)

Luckily my income did much better

[Last Conformist]

Originally posted by chegitz guevara
I have no idea what the numbers mean. Or the acronyms.

Plus, I look at this United States: +38% (+54%) and at a glance, I'd think it means that the USA is doing quite well against Europe.

Near as I can tell, it means your advantage is eroding pretty quickly.

[Giancarlo]

Well considering the EU economy has completely stagnated I wouldn't count on that.

[el freako]

Sorry, I guess I made it too esoteric.

First off to explain the acronyms:

OECD = Organization for Economic Cooperation and Development, a site containing much economic data used internationally link
GDP = Gross Domestic Product, a measure of how much an economy produces in a year, the common means for making comparisons between economies.
PPPs = Purchasing Power Parities, a method of making price comparisons between economies that is more accurate than just using exchange rates.
GK, EKS = two methods of calculating PPPs, Geary-Khamis and the one currently used by the OECD (I forget which economists the acronym is named after)
EU15 = The 15 member states of the European Union (i.e. the membership before the 10 accession states joined last year)
Output Gap = the difference between actual output and trend output (a method of correcting for different stages in the economic cycle)


And secondly the data:

The Canadian figure of +8% (+17%) means that in 2002 the average Canadian had an income 8% higher than the EU15's average, whilst in 1990 it was 17% above (on this measure, which remember corrects for the effects of the economic cycle).

Originally posted by Giancarlo
Well considering the EU economy has completely stagnated I wouldn't count on that.

The above figures prove otherwise, don't let your beliefs get in the way of discerning the truth Giancarlo.

[Giancarlo]

The above figures prove otherwise, don't let your beliefs get in the way of discerning the truth Giancarlo.

Here we go with the idiocy again.. I have had enough of this... you just can't accept the ****ing facts can you? Is there something in your head that prevents you from doing so? Accept the facts. Europe is in trouble as a whole. And as far as I'm concerned, once the French and Germany economy continue to take nosedives these problems will grow.

http://news.yahoo.com/news?tmpl=story&u=/afp/20050222/bs_afp/germanyeconomygrowth_050222080011

[Starchild]

Let's see. el freako, a professional economist providing facts, data, and links from important global institutions, vs Giancarlo, who gave us a link from yahoo news.

[Giancarlo]

Originally posted by Starchild
Let's see. el freako, a professional economist providing facts, data, and links from important global institutions, vs Giancarlo, who gave us a link from yahoo news.

the guy isn't a professional on this forum. From every time I have seen him, he has appeared as the most dimwitted and foolish.. even if I show German government figures that their economy is tanking.

[Saras]

Are you a masochist, fezbot? You seem to love getting pwned, and when you can't get enough, you self-pwn...

[Giancarlo]

Originally posted by Saras
Are you a masochist, fezbot? You seem to love getting pwned, and when you can't get enough, you self-pwn...

how about you do what dick cheney said, and go **** yourself?

[el freako]

Originally posted by Giancarlo

Here we go with the idiocy again.. I have had enough of this... you just can't accept the ****ing facts can you? Is there something in your head that prevents you from doing so? Accept the facts.

I can provide you with the sources and methods so you can calculate the above figures yourself (a proper scientist always trys to go back to the raw data rather than relying, as seem to, on stuff compiled for you)

If you can find any errors or a different interpretation then I am quite willing to admit that what I believe is wrong.

GDP (the 1990 data is converted using GK-PPP's you will have to change these into EKS PPPs, I can't find the original .pdf file I used for this on the 'net as I renamed it but I have attached it to this post. Also note that EKS PPPs are not available for Luxembourg and East Germany in 1990, I have used GK PPPs in those cases (even though it probably overstates their income).
Population you will have to add East Germany's Population to the West German figure, According the the GDDC website it was 16.111m in 1990.
Net Foreign Income you will have to calculate this as a percentage of GDP
Output Gaps you will find these on the final tab of the worksheet

Originally posted by Starchild
et's see. el freako, a professional economist providing facts, data, and links from important global institutions, vs Giancarlo, who gave us a link from yahoo news.

Actually i'm not a professional economist (although i'm flattered you got that impression) I am a programmer by profession.
However economics (and international comparisons in particular) has been my passion and hobby for over twenty years.

edit: corrected text around link added link to provide Net property income from abroad, Output Gaps and also advised over situation regarding Luxembourgois and East German data.