13th South Korea 957,053(millions of USD)
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24th Republic of China (Taiwan) 383,307 (millions of USD)

Well, Taiwan is not even a country

2003.3.6…….3.3
2004.6.2…….4.6
2005.4.1…….4.1
2006.4.9…….5.0
2007.5.7…….5.0

average4.9…..4.4

Taiwan real economy is better than korea
GDP PPP 2007

Taiwan 30128
korea 24587

nomial GDP is only exchange rate not real economy

korea unemploment rate lower because south korea near half work only part-time work

Sure there are, but they don’t come from shell companies in the middle as you purported. The costs mainly come from extra logistics and wasted time.

Please check the bottle of the next bottle of Smirnoff alcopop you drink and you’ll notice the importer is a branch office of some company in the British Virgin Islands. Since the product is not made in China, why is Smirnoff using these shell companies? Google Transfer Pricing and all will be revealed.

Michael

There’s not much to be done, as long as you believe yeast and economies grow the same way, and as long as you rely on an IMF database whose data origins are a mystery.

Michael, this is just ridiculous. I never made any claim that “economies grow like yeast” or anything remotely like it. What I did say is that the growth rate formula is a general one that can be used to calculate the average growth rate of anything over a span of time. And it’s true.

Your comment about the differences between nominal and real GDP is noted, and I am not claiming that these nominal GDP figures are the same as real GDP figures (which also give Korea a greater growth rate than Taiwan). As for the source of the data, I’m not really partial to any one source. Your link to the DGBAS only goes back to 2002 data, but what’s there is similar to the IMF data.

It may fit some ideological commitment you have, but it has nothing to do with reality…

These personal insinuations don’t really do anything productive.

Mark’s claim is that economic growth is like bacterial growth and that Taiwan’s economy is growing at an annualized rate of 1.2%, based on that perception. Neither claim is supportable. The reality is that by any reasonable measure — commonly used by real economists — Taiwan’s economy is growing around 4-5% every year. Of course, the basket of goods issue is a problem, as is defining “inflation” — several measures are used.

I’m open to advice about how to improve this analysis, though.

There’s not much to be done, as long as you believe yeast and economies grow the same way, and as long as you rely on an IMF database whose data origins are a mystery. The reality, given by the Taiwan DGBAS, is that economic growth between 2002-2006 averaged 4.60%. The DGBAS revisions are here:

http://eng.stat.gov.tw/public/Attachment/76128542971.doc

This page will take you to their massive statistical databases:

http://eng.dgbas.gov.tw/mp.asp?mp=2

You might note the real vs nominal numbers in the revisions, in which nominal growth is frequently below real growth. In this case, nominal growth is below real growth every year. Your 1.2% calculation is complete nonsense, Mark. It may fit some ideological commitment you have, but it has nothing to do with reality. If you really want to claim that Taiwan grew 1.2% over the 2000-6 period, you need to supply some pretty heavy reasons why everyone should disregard the real GDP calculations made by the DGBAS.

Michael

I have an economics degree and although we use a base year but more commonly we just have nominal - inflation just for short term. The problem today is that people are cheating on the inflation by altering basket of goods. Btw, why hate to tell you guys the reason that we are focusing on Korea is that the other two, HK and Singapore, have out performed far beyond Taiwan and Korea when Taiwan used to be the lead????

You are right that I calculated the growth of nominal GDP, rather than real GDP. You and “Passing by” are also right about inflation not being deducted from these growth estimates.

However, USD denominated nominal GDP calculations do still have their uses. One common one is calculating returns on investments. I also think that this is a reasonable way to measure relative changes in international buying power between Taiwan and Korea as long as their inflation rates don’t differ too much. I’m open to advice about how to improve this analysis, though.

Real GDP is calculated by designating a particular year a base year, and then recalculating subsequent production using the base year dollars. It cannot be calculated using the formula you use because economic growth is different than money in savings account or bacterial growth, neither of which can be negative (hopefully!) or is affected by inflation of the unit of measurement (money) over time. I’m sure you remember the examples from your econ textbooks, but to put it simply, imagine Taiwan makes only bats and balls….

In 2000 Taiwan makes 50 balls worth $1 each, and 50 bats worth $3 each, for a total economy of $200. The next year Taiwan makes 60 balls worth $1.25 each, and 60 bats worth $4 each. Our nominal economy is $315 dollars, for a growth rate of over %50. However, to find the real growth rate, we use 2000 prices to calculate the economy as if the new production took place the previous year — 60 balls at $1, and 60 bats at $3. Our real GDP is actually only $240, and our growth rate is only 20%. Real economists calculate real GDP growth using a bundle of items. As you can imagine, arguments over weighting and representativeness are unending.

Because inflation varies from year to year nominal GDP is worthless in calculating GDP growth. Hence your claim that Taiwan has an annualized growth rate of 1.2% is not supported by any known facts or reliable methodology.

Hope this clarifies.

Michael