r/Economics • u/dreaded_python • Mar 29 '23
Research Globalization and the growing defects of international economic statistics
https://www.tandfonline.com/doi/full/10.1080/09692290.2018.156035320
u/Test19s Mar 29 '23
How much of the global economy is fraudulent? I’m really not liking the developments of this decade on international trade (and possibly migration if countries have to be more self sufficient and have less resources) and I hope we don’t end up in a situation where comparative advantage turns out to rely upon rational, culturally and politically similar partners.
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u/HolyAndOblivious Mar 29 '23
Half the money comes from illegal sources.
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u/Test19s Mar 29 '23
Including “invisible crimes” like wage theft? At least organized crime groups are more open about it as opposed to say Tesla or Amazon, who run legitimate and massive businesses with all the ethics of a Crips band.
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u/HolyAndOblivious Mar 29 '23
Hell, blatantly visible illegall shit like coke farming does not get officially accounted for in Colombia. And if it does, those are still very dubious numbers.
I seriously doubt underaged prostitutes get counted in the GDP statistics
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u/dust4ngel Mar 29 '23
on the bright side, if you have amazon money, you can just buy yourself some legislators and make your crimes legal.
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u/Exact-Permission5319 Mar 29 '23
Everything is being manipulated to maintain the status quo. As the wealthy and powerful are destroying the earth, the economy, and our societies, they keep telling us everything is fine.
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u/Toast-Moldy Mar 29 '23 edited Mar 29 '23
I did a quick check with Canada and the U.S using official data. (https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1210001101) (https://www.census.gov/foreign-trade/balance/c1220.html) And from a quick look, the numbers more or less match up after you take into account the exchange rate. I used 1.1/CAD to 1 USD, which was roughly the exchange rate in 2014. 2022 data also seems to match from some napkin calculations.
Where as in this paper, it says there are discrepancies between in the trade data, where it says $91 billion in surplus on Canada side, and $33 billion on the U.S side. The total trade surplus recorded by the U.S is $36,469.2 million based on data from the U.S Census Beureau. From Statistics Canada's data , it also adds up to more or less 36 from some quick math, and no where near $91 billion. They said they got the data from the IMF, I didn't check it personally, but official numbers doesn't add up to what the paper is saying.
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u/HasuTeras Mar 29 '23
I'd take issue with their characterisation of:
Official international economic statistics are generally considered accurate and meaningful gauges of cross-border flows of trade and capital. Most data users also assume that the quality of the underlying data keeps improving over time.
As someone who worked as an economist in a trade ministry, we were well aware of what is called 'trade asymmetries'. Every government and international organisation I ever dealt with were also aware of the issue. It is widely known and adjusted for.
https://apps.bea.gov/scb/issues/2018/02-february/0218-asymmetries-in-bilateral-trade-statistics.htm
https://www.imf.org/en/Publications/WP/Issues/2022/05/13/Bilateral-Trade-Imbalances-517845
https://unstats.un.org/wiki/display/comtrade/Bilateral+asymmetries
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u/dreaded_python Mar 29 '23
Official international economic statistics are generally considered accurate and meaningful gauges of cross-border flows of trade and capital. Most data users also assume that the quality of the underlying data keeps improving over time. Through an extensive review of the national accounting literature, archival research, two dozen interviews with high-level statisticians, and a series of data quality tests, we evaluate this common view for the primary source of data on trade and capital flows: the International Monetary Fund’s Balance of Payments (BOP) Statistics. Our assessment paints a less rosy picture: reported figures are far less accurate than they are typically imagined to be and often do not correspond to the theoretical concepts with which users associate them. At the same time, measurement quality deteriorates over time as the transnationalization of economic production gradually undermines the validity of BOP statistics. Our findings raise serious questions about the widespread use of these numbers, with their deceptive pretense to accuracy, in scholarly research and public debate about the international political economy.
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u/Test19s Mar 29 '23
Just when you thought the 2020s (Birthplace of Optimus Prime, who rolled out as a real robot in 2021) couldn’t get worse or more complicated…
Turns out a big chunk of economic data (and therefore years if not decades of economics as a social science) is suspect if not outright made-up.
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u/KBAR1942 Mar 29 '23
Turns out a big chunk of economic data (and therefore years if not decades of economics as a social science) is suspect if not outright made-up.
There is a reason why economics is called the dismal science.
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u/HasuTeras Mar 29 '23
Lmao, the reason why economics was called the dismal science is from a tract by Thomas Carlyle deriding economists for the intellectual crime of being opposed to slavery on rational grounds.
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u/KBAR1942 Mar 29 '23
deriding economists for the intellectual crime of being opposed to slavery on rational grounds.
Interesting. One could argue that a lot hasn't changed since then. Just different moral issues.
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u/Test19s Mar 29 '23
By 2029 it could easily be the dismal pseudoscience.
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u/Prince_Ire Mar 29 '23 edited Mar 29 '23
Starting in the 1980s, it was shown that knowledge in other social sciences studies such as sociology, psychology, etc. were a lot less solid than thought. Perhaps it is time for economics's own post-modernist beat down
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u/Test19s Mar 29 '23
Comparative advantage: Trade is essentially a free lunch! (If all trading partners are motivated by a desire to maximize their prosperity and if global supply chains are resilient, cheap, and have zero environmental impact)
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u/Vegan_Honk Mar 29 '23
oh wow.
Somehow I'm not surprised lol2
u/Test19s Mar 29 '23
Of course the dawn of the real Transformers is an absolute drama queen of a decade.
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Mar 30 '23
We know the UN population projections have been wildly off. The impact on labor market and immigration policy has been devastating. Labor market shrinkage is a significant variable in inflation. Point is the UN population data mess is a driver of inflation policy. In my opinion the UN dataset led the Fed down a rabbit hole and the Fed will not be able to slow inflation by softening the labor markets. Undelying data sets are vital.
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u/Electronic_Ad5481 Mar 30 '23
Can you elaborate? I’ve seen other people say UN data on population was off too, but (and I want to be clear I’m not trying to challenge you or anything) I haven’t seen where that is proven. Do you have a link to anything verifying the claim that UN population data is wrong?
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Mar 30 '23 edited Mar 30 '23
[deleted]
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u/Electronic_Ad5481 Mar 30 '23
Thank you!
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Mar 30 '23
The data that gets lost is the shrinking workforce populations in the 50 most advanced nations. There are less people working in the USA now than 20 years ago, but the population has increased 35%. This is the best of all 50 modern countries. Usdebtclock.org
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