Uncertainty about the numbers
There’s some debate on how reliable the GDP growth rates from China are. In part, this worry comes from the pre-reform era in which all levels of production had to reach targets and may not have been entirely truthful. Also, the string of very high growth rates over the past two decades is unprecedented. Can FRED shed some light? Well, it has seven different series that measure GDP in different ways. One is from the World Bank, one is from the OECD, and five are from the Penn World Tables. Differences pertain to how currency conversions are treated. For example, there’s the issue that exchange rates may drift away from so-called purchasing power parity (PPP) and which side of the GDP equation is used. Indeed, technically, there are three ways to measure GDP: add up all output, all expenditures, or all incomes. All three should get to the same number, but in practice there are some residual errors. So what does this graph show? These different measures essentially come to the same conclusions, the differences being relatively small and not systemically biased in one direction. However, these statistics are based on information that is coming out of China. And, at least in the past, there was plenty of uncertainty arising from that.
How this graph was created: Search for “real GDP China” and select the relevant series, then click on “Add to Graph.” Click the “Edit Graph” button, then change the units to “Percent Change from Year Ago” for the lines that are not yet in growth rates.
Suggested by Christian Zimmermann.
By definition, “emerging” economies are in transition from “developing” status to “developed” status, which is generally a bumpy road that may involve more-frequent crises and stronger economic fluctuations. One way to visualize this transition in FRED is to graph per capita GDP growth rates for the BRIC countries (Brazil, Russia, India, China) and compare them with the rate for the U.S. (thick black line). While it is usually better to show fewer series on one graph, the idea here is simply to illustrate that these economies bounce around much more than the U.S. economy does. The U.S. rate is never the highest. On the rare occasions when it is the lowest, it is only barely so—with 2007 being the exception.
How this graph was created: Search for “Constant GDP per capita” for the various countries and add the series to the graph. Transform each series to “Percentage change” and emphasize the line for the U.S. so it stands out (in this case, it is thicker and black).
Suggested by Christian Zimmermann