Can we really blame the gross
domestic product reports on the weather?
The U.S.
did just that when it blamed the 100 billion lost on snow early this year. China is now
following suit of the bazaar claim that cool weather is the reason for the
outcome and higher levels of activity growth in the recent outcome of the GDP
data. Seems odd to me considering that the pollution in China is so intense you cannot even
see the sun at times. Since when does
economic data rely on weather? To better understand this let us look at how we see
and get the GDP overall. We have to understand the factors of the data
research.
The System of National Accounting
(SNA) and the Material Product System (MPA) that was used in the early soviet
union, still used by some countries as an alternative to the United Nations System
of National Accounts (UNSNA) or (SNA) that focuses on "free market"
prices. This is supposed to provide data of economic activity on an
international level. Countries cannot provide the same data, it is impossible,
the country that invests billions into research, is not going to be the same as
a country that cannot be assessed because of geographical factors, or
socio-political instability. Some governments will not allow surveys of all
kinds to take place. Many factors prevent the “same” data from being entered. The
input-output levels can be highly manipulated due to the standard. The UN cannot
enforce the same standard. Since it differs from country to country so there
are often discrepancies, quarterly and yearly revisions, but as long as they
provide sufficient data on national accounts the UN will fit it into its
standard, all the other accounts can be reworked up to UN standard. If you look
UN Yearbook, under detailed tables the data over decades instead of yearly you
will see a trend change significantly. Studies in economics have shown that
even the “free market prices” are truly regulated and administered prices in
Western countries.
Many people do not even know that
the MPA exists. The MPA that uses administered prices, measures the output of
“material goods” tangible products, in comparison to “services”, usually in
national accounts, the data collected is only to measure the “value” of outputs
produced. Comparing the MPS and SNA is how China determines the GDP.
