HAS US GDP GROWN OR NOT SINCE 2019? IT DEPENDS ON THE DEFLATOR.
May 28, 2023 6 Comments
I have reposted this article as GDI and GDI+GDP were mislabeled in Graph 1.
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THEPLANNINGMOTIVE.COM 
The deficiencies and biases of so-called official statistics are relatively well recognized as is their potential to be manipulated for political purposes.Given these ;imitations and deficiencies the point of interest is what is the concrete basis on which economic policy decisions are made? Do they(FED et al) truly smoke their own dope (ie official statistics) or do they collect and use other information not publicly available?
They are and getting to grips with what the true state of play is difficult. I was of the opinion that the FED was overreacting to inflation. On reflection I may be the one in error. I was surprised by the results of my analysis of Q1 particularly the trading accounts of the corporations which showed much stronger rates of inflation, typically +10%, and further, how inflation was concentrated not only in output prices but office (SGA) expenses as well, as opposed to input prices (cost-of-sales) which fell relatively. My next post will be on wages and prices in the context of falling inflation.
This is an interesting topic, and it is also key to the Marxist criterion of development of the productive forces: there must be real growth in production and labor productivity for these to develop. With the known limitations, we always assume that if the real product (and especially the real product per person grows) there is a development of the productive forces. In short, that GDP growth is a proxy for understanding whether capitalism is, in a given time and space, a functional form for the development of the productive forces. It goes without saying that this is of total importance when it comes to determining and dating the phases of the capitalist boom and bust cycle.
I am going to review the sources of the data that you have presented, but in a preliminary way I would like to make 2 observations:
1) Indeed, it seems unlikely that the difference between the prices of the corporate sector and the official deflator is explained by a disinflation in the non-corporate sector that is much lower in relation to corporate businesses in particular and domestic businesses in general.
2) It would be great to generate much longer series to draw better conclusions.
You are correct, it is an interesting and vital topic. When given the chance the capitalists will always seek to reduce the perception of price rises as it helps reduce wage rise expectations. Please do extend the series. The data is readily accessible in the three NIPA Tables I have cited. The reason I did not extend it beyond 2019 was the opinion that with inflation subdued in the years preceding it, there would be little difference between the official deflators and the one found hidden in Table 1.14 relating to the corporate sector. Finally I chose 2019 as my base year because in that year, at least the second half, the global economy stagnated and were it not for repressed interest rates would have most likely entered into recession.
Yes, I played around with the data a bit and saw your point. But it is a theme to follow in the coming quarters. By the way, Brian. Have you not considered the possibility of copying the content of your articles directly in the post, to make them more accessible, instead of just embedding the pdf? Also, if you give me permission, I would like to start translating some of your papers into Spanish, as soon as I have some free time. Of course, I will send you the translated files before posting or sharing them for your review.
I would be honored were you to translate articles into Spanish. Can we continue this discussion via email. Perhaps you can then explain the advantages of copying directly to the site. Please use briangreen@theplanningmotive.com