Real GDP and population in Russia and Ukraine as reported by the Maddison Project Database and the Total Economy Database. Crimea

 In one of the previous posts, we compared the evolution of real GDP per head in Russia and Ukraine since 1980. Data obtained from the Maddison Project Database (MPD) were used. After the detailed comparison of the data from the MPD, Total Economy Database, and the OECD, we found that the GDP per capita estimates can differ dramatically between these sources. In order to get a less biased comparison, we have to revisit our estimates and extend the set of data sources. Since Ukraine is not included in the OECD database, we limit comparison in this post to the TED and MPD.

Figure 1 compares the real GDP per capita evolution in Russia and Ukraine as reported by the TED and MPD. The reference years are different, and thus, the levels also differ between these two sources. The normalization to the corresponding levels in 1980 allows a comparison of the relative growth. Figure 2 displays the normalized curves. The relative performance of Russia and Ukraine is quite different for the MPD (large difference) and the TED (much smaller difference). Figure 3 displays the ratio of GDP per capita in Russia and Ukraine for these two sources. The TED gives the total difference of 1.4 in 2018 and the MPD estimates the same difference as 1.74. Such discrepancy is commonplace in the MPD and TED data. It is difficult to judge which estimate is more accurate: the TED usually gives larger growth to the USA and the MPD more generous to European countries. Both could be biased.

The Maddison Project Database does not explicitly provide the real GDP estimate. The TED includes such an economic series among many others. Figure 4 depicts the real GDP in Russia and Ukraine between 1970 and 2019 (in 2019 $). The ratio of the GDPs reaches 7.44 in 2019, but evolution is also important for the relative performance comparison.  Figure 5 presents the same curves as in Figure 4, but normalized to their respective levels in 1970. One can see that the current real GDP in Ukraine is just 61% of the peak level in 1989. This low value is partly explained by the falling population in Ukraine. Figure 6 shows the evolution of the population in Russia and Ukraine between 1970 and 2019 as reported by the TED. Both time series are normalized to the 1970 levels. There is a significant increase in the Russian population from 2013 to 2014 and a similar but much smaller decrease in the Ukrainian population. The increment is 2,594,000 and the fall in Ukraine lasts a few years with a total of ~1,000,000 between 2013 and 2016. It looks like the TED added the Crimean population to Russia but did not subtract it from Ukraine. The MPD population estimates are identical to the TED.   

Figure 1. Comparison of real GDP per capita evolution in Russia and Ukraine as reported by the TED and MPD. The reference years are different and thus the levels also differ between these two sources.

Figure 2. The relative performance of Russia and Ukraine as represented the GDP pc curves normalized to their levels in 1980. 

Figure 3. The ratio of GDP per capita in Russia and Ukraine for the TED  and MPD data

Figure 4. Real GDP in Russia and Ukraine between 1970 and 2019 as reported by the TED.

Figure 5. Same as Figure 4, but normalized to the 1970 levels. 

Figure 6. The evolution of the population in Russia and Ukraine between 1970 and 2019 as reported by the TED.

creeping google

 I am removing Big Tech applications from my devices (and devices). Never used Twitter and killed my Facebook account ten years ago. Last week removed Chrom and replaced google search. reduced the use of gmail to a minimum with the goal of zero use. Ready to remove WhatsApp and move to something not so fa*cy. 

And after all, got a message that Fitbit is bought by google. I use Fitbit couple of years and now what - through it away and buy Garmin?

Also, i am going to remove this blog. Blogs seem to be an obsolete activity.

Comparison of real economic growth as expressed by GDP and GDP per capita

 There is an obvious difference in the estimates of real economic growth as expressed by real GDP and GDP per capita. The former includes the growth in population, which may be related to different sources: higher birth rates, lowering mortality rate, and net migration. There are countries with the population growing exponentially, e.g. the USA. Some developed countries do not demonstrate significant population growth. A few countries have a negative population growth forecast in the coming decades, e.g. Germany. It is interesting to compare real economic growth in developed countries using both variables. A series of figures below present various cases and illustrate the difference between the studied developed countries. We also present a table summarizing the study. The main goal is to highlight the importance of the growing population for fast economic development. The extensive economic growth is not unlimited, however. The US population is currently growing at a slower rate than in the 1990s even with intensified migration processes. 

While you fight for other people non-economic rights capital privatizes your wages and salaries

 Personal income in the USA is the key indicator of the money share between labor and capital. Figure 1 shows personal income in nominal dollars at a quarterly rate. The employee share is defined by the “Compensation of employees’ and in a narrow sense by “Wages and salaries”.

Figure 2 demonstrates that the share of personal income related to “compensation of employees” has been decreasing since the 1970s, and lost almost 5% between 2004 and 2012. This dramatic fall is related to “wages and salaries”. People lose income for their jobs and this lost income fled to those who own the capital.   Figure 3 illustrates the share of wages and salaries in the compensation of employees. It dropped by almost 15% between 1948 and 1994.   

Figure 1. Nominal estimates of personal income, compensation of employees, and wages and salaries in the USA since 1947.  

 

Figure 2. The shares of “Compensation of employees” and “Wages and salaries” in the “Personal income”, as presented in Figure 1. The period since 2000 is presented separately to highlight the fall in the shares of personal income. 

Figure 3. The ratio of “Wages and salaries” and “Compensation of employees”.

Trump supporters have to thank Big Tech ban

 The Big Tech ban was perceived nervously by Trump supporters as likely not complying with freedom of speech's highest standards. In my view, they have to thank Big Tech - in the absence of messages from Trump, there was no room for interpretation of his words. During mostly peaceful BLM demonstrations, there were some provocateurs who were presented as the participants of the peaceful process. There are also people who are waiting for any word or action from Trump to act in any direction they want. There is no way to screen out such people in big crowds.

Big Tech actually save Trump from the worst scenario. It seems their action was a sincere wish to assist Trump.

To Trump or not to Trump

I was involved in the analysis of mechanical and seismic effects of underground nuclear tests - from small to 150 kt. It helps me now to be more effective in monitoring the non-testing regime. Thirty five years ago, we developed a mechanical model with a sleeping hierarchical structure of inhomogeneities in various rock types. An underground nuclear explosion creates an extremely high-amplitude shock wave damaging the surrounding rocks. The sleeping hierarchical structure, i.e. a system of healed cracks and discontinuities,  is excited by the shock wave, emits (induced) elastic waves, and we measure these waves by seismometers. The features of these seismic waves allow recovering the features of the sleeping hierarchical structure.

Trump is an extremely powerful source of energy damaging the internal structure of the US political and governmental systems. He is definitely not a part of this system and his actions were so high-amplitude that the system was excited and started to send signals to the outer world. We even do not need to measure them with precise equipment (but we have to) – they are visible and striking. It is not for me to judge is it for better or worse for the USA.

I have just academic interest in the active impact on physical and social systems. The COVOD-19 pandemic, for example, is high stress for the economic system and the response of the US economy has to be studied in tiny details in order to understand the real structure and processes underlying economic activity. This also helps to distinguish between quantitatively accurate and quantitatively worthless economic models. In this blog, I have presented some findings associated with the pandemic.

The experience with active impact on various systems and the study of their reaction gives me some confidence that we have to Trump (in the sense we have to beat and hit). When we do not Trump, we are missing important information on the vital system features. In social sciences, Gorbachev and Yeltsin were two Trumps in the Soviet Union and Russia. We have learned a lot about the governing system and people. Not all findings were pleasant. But now we have no illusions about friendship and cooperation - no such things between businesses and countries.  

Conservatives should not bother about liberals. They pretend to be Alphas from "Brave New World", and thus, destroy each other

Brave New World

Mustapha Mond smiled. "Well, you can call it an experiment in rebottling if you like. It began in A.F. 473. The Controllers had the island of Cyprus cleared of all its existing inhabitants and re-colonized with a specially prepared batch of twenty-two thousand Alphas. All agricultural and industrial equipment was handed over to them and they were left to manage their own affairs. The result exactly fulfilled all the theoretical predictions. The land wasn't properly worked; there were strikes in all the factories; the laws were set at naught, orders disobeyed; all the people detailed for a spell of low-grade work were perpetually intriguing for high-grade jobs, and all the people with high-grade jobs were counter-intriguing at all costs to stay where they were. Within six years they were having a first-class civil war. When nineteen out of the twenty-two thousand had been killed, the survivors unanimously petitioned the World Controllers to resume the government of the island. Which they did. And that was the end of the only society of Alphas that the world has ever seen."