IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/17729.html
   My bibliography  Save this paper

Who Shrunk China? Puzzles in the Measurement of Real GDP

Author

Listed:
  • Robert C. Feenstra
  • Hong Ma
  • J. Peter Neary
  • D.S. Prasada Rao

Abstract

The latest World Bank estimates of real GDP per capita for China are significantly lower than previous ones. We review possible sources of this puzzle and conclude that it reflects a combination of factors, including substitution bias in consumption, reliance on urban prices which we estimate are higher than rural ones, and the use of an expenditure-weighted rather than an output-weighted measure of GDP. Taking all these together, we estimate that real per-capita GDP in China was 50% higher relative to the U.S. in 2005 than the World Bank estimates.

Suggested Citation

  • Robert C. Feenstra & Hong Ma & J. Peter Neary & D.S. Prasada Rao, 2012. "Who Shrunk China? Puzzles in the Measurement of Real GDP," NBER Working Papers 17729, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17729
    Note: ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w17729.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Barnett, William A. & Erwin Diewert, W. & Zellner, Arnold, 2011. "Introduction to measurement with theory," Journal of Econometrics, Elsevier, vol. 161(1), pages 1-5, March.
    2. Balk,Bert M., 2012. "Price and Quantity Index Numbers," Cambridge Books, Cambridge University Press, number 9781107404960.
    3. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    4. Diewert, W. E. & Wales, T. J., 1988. "A normalized quadratic semiflexible functional form," Journal of Econometrics, Elsevier, vol. 37(3), pages 327-342, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hosseiny, Ali, 2017. "A geometrical imaging of the real gap between economies of China and the United States," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 479(C), pages 151-161.
    2. Ali Hosseiny, 2015. "Violation of Invariance of Measurement for GDP Growth Rate and its Consequences," Papers 1507.04848, arXiv.org, revised Aug 2016.
    3. Robert J. Hill & Iqbal A. Syed, 2015. "Improving International Comparisons of Prices at Basic Heading Level: An Application to the Asia-Pacific Region," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(3), pages 515-539, September.
    4. repec:eee:wdevel:v:97:y:2017:i:c:p:102-121 is not listed on IDEAS
    5. repec:lrk:eeaart:36_1_9 is not listed on IDEAS
    6. Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2013. "Modelling the world economy at the 2050 horizon," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(4), pages 617-654, October.
    7. Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2012. "The Great Shift: Macroeconomic projections for the world economy at the 2050 horizon," Working Papers 2012-03, CEPII research center.
    8. Inklaar, Robert & de Jong, Harmen & Bolt, Jutta & van Zanden, Jan, 2018. "Rebasing 'Maddison': new income comparisons and the shape of long-run economic development," GGDC Research Memorandum GD-174, Groningen Growth and Development Centre, University of Groningen.
    9. Almås, Ingvild & Johnsen, Åshild Auglænd & Kotsadam, Andreaa, 2014. "Poverty in China Seen from Outer Space," Memorandum 11/2014, Oslo University, Department of Economics.
    10. Fadi Hassan, 2014. "The Price of Development," The Institute for International Integration Studies Discussion Paper Series iiisdp446, IIIS.
    11. Anderson, Kym & Strutt, Anna, 2012. "The changing geography of world trade: Projections to 2030," Journal of Asian Economics, Elsevier, vol. 23(4), pages 303-323.
    12. Hassan, Fadi, 2016. "The price of development: The Penn–Balassa–Samuelson effect revisited," Journal of International Economics, Elsevier, vol. 102(C), pages 291-309.
    13. Ingvild Almås & Anders Kjelsrud, 2016. "Pro-poor Price Trends and Inequality - The Case of India," CESifo Working Paper Series 5740, CESifo Group Munich.
    14. Morrow, John & Carter, Michael, 2013. "Left, right, left: income, learning and political dynamics," MPRA Paper 45020, University Library of Munich, Germany.
    15. Deng, Kent & O’Brien, Patrick Karl, 2016. "China’s GDP per capita from the Han Dynasty to communist times," Economic History Working Papers 64857, London School of Economics and Political Science, Department of Economic History.
    16. Robert Inklaar & D. S. Prasada Rao, 2017. "Cross-Country Income Levels over Time: Did the Developing World Suddenly Become Much Richer?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(1), pages 265-290, January.
    17. Kent Deng & Patrick Karl O’Brien, 2014. "Creative Destruction: Chinese GDP per capita from the Han Dynasty to Modern Times," Working Papers 0063, European Historical Economics Society (EHES).
    18. repec:eee:jimfin:v:77:y:2017:i:c:p:18-38 is not listed on IDEAS

    More about this item

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17729. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Joanne Lustig). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.