Monday, June 15, 2015

Nothing is perfect including GDP

GDP is a kind of misleading yardstick:

1. Every country boosts their GDP by government spending. However, China spends most in infrastructure while the US spends in the endless wars to be the big brother and welfare to buy votes. The line between investing and consumption is fuzzy.

2. 10% over the first 25 years is sustainable for a emerging economy. After that, 5% is fine.

Besides the earning growth of corporations, we also need to check many other factors that would affect future earnings. Actually China can improve their citizens' living standard without increasing GDP such as paying attention to pollution, food regulation, corruption

No comments:

Post a Comment