This is an extension of the previous post comparing the real GDP per capita (GDPpc) estimates obtained from various sources. We demonstrated that the GDPpc estimates for a given country for the same period from three major sources (the OECD, Total Economy Database, and Maddison Project Database) may give quite different total growth. In other words, the history of real economic development depends on the source, and the overall deviation is extremely large. One cannon consider this strong deviation as a stochastic bias. In this post, we extend the list by 6 countries: Australia, New Zealand, Italy, Spain, Switzerland, and Russia. Switzerland and Russia are likely the most striking examples of the difference between sources so far.
Figure 1 presents
the case of Australia with the GDPpc estimates spanning the period between 1959
and 2018. The MPD data provides the largest total growth of 3.62. This is
likely due to the underestimation of the initial value in 1959 since the
current GDPpc levels are close. The OECD and TED report very similar estimates.
The lower panel in Figure 1 illustrates the fact that the difference between the
OECD and TED is likely stochastic with a small negative trend. All three time
series were close between 1960 and 1970, and then started to slightly deviate. The
biggest break was observed in 1990 when the MPD started to demonstrate a much
higher rate of growth. The Maddison Project Database (University of Groningen) likes
Australia and the other two sources are less benevolent.
Figure 2 illustrates the case of New Zealand. The MPD and TED give the best result since 1970 – the real GDP per capita grew by a factor of 1.95. The OECD is less generous and gives the factor of 1.86. The difference between the sources is low and one can suggest that New Zealand is not an economic rival for any major economy, and thus, the estimates of real economic growth are not biased. One can trust these data.
Figures 3 and 4 present Italy and Spain (both European
countries) with the MPD providing the highest total growth estimates since
1970. The second best source is the OECD for Italy and the TED for Spain.
The case
of Switzerland must be a joke. The total increase in real GDP per capita
reported by the MPD is 2.56, and the other two sources give approximately 1.6. The
difference is related to the very low MPD estimate for 1970 - $23,459. It is
not clear how the MPD estimates are so different if all economic agencies use
the same original data and methodologies. In my view, such differences are not
acceptable. One cannot assess the statistical performance of the real economic
growth models using fully incompatible estimates of basic economic variables.
The positive
side of the observed differences is that one can judge the implicit relationships
between countries, i.e. who is who in this world. The closest US allies can be
easily revealed as well as the friends of Germany or France.
Finally,
Figure 6 presents Russia. The MPD and TED estimates between 1960 and 1990 are
identical and then the MPD (Europe) reports faster real economic growth than
the TED (USA). The difference between the TED and MPD has a linear dependence
on the time between 1990 and 2010. No difference is observed since 2010.
Figure 1. Upper panel: The evolution of real GDP per capita estimates in Australia as borrowed from the Organization of Economic Cooperation and Development (OECD, Headquarters – Paris), Maddison Project Database (MPD – The Netherlands), and Total Economy Database (TED – USA, China, …). All time series are normalized to their respective values in 1959. Lower panel: Two pair-wise ratios revealing the relative differences in the three time series.
Figure 2. Same as in Figure 1 for New Zealand
Figure 3. Same as in Figure 1 for Italy
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Figure 5. Upper panel: GDPpc estimates from three sources. Middle panel: the curves in the upper panel are normalized to their respective levels in 1970. Lower panel: pair-wise ratios of the normalized curves.
Figure 6. Same as in Figure 1 for Russia
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