GDP magic

[39degN]

through reading the GDP data offered by different resource. i found there's a dramatic difference. take china as an example:

CIA worldfactbook:

GDP 6.449 US$ trillion

ranking the second place.

click here

World Bank:

GDP or GNI US$ 1.4 trillion

ranking the seventh.

clike here

i know they must based on different methods, but the difference is so huge, it's quite confusing. hope it's not becuase of my carelessness of reading.

[Catdiseased]

The CIA uses purchasing power parity, whereas I think that the Worldbank uses the exchange rate.

[39degN]

yeah, from the Appendixes i got it:

CIA:

GDP methodology

In the Economy category, GDP dollar estimates for all countries are derived from purchasing power parity (PPP) calculations rather than from conversions at official currency exchange rates. The PPP method involves the use of standardized international dollar price weights, which are applied to the quantities of final goods and services produced in a given economy. The data derived from the PPP method provide the best available starting point for comparisons of economic strength and well-being between countries. The division of a GDP estimate in domestic currency by the corresponding PPP estimate in dollars gives the PPP conversion rate. Whereas PPP estimates for OECD countries are quite reliable, PPP estimates for developing countries are often rough approximations. Most of the GDP estimates are based on extrapolation of PPP numbers published by the UN International Comparison Program (UNICP) and by Professors Robert Summers and Alan Heston of the University of Pennsylvania and their colleagues. In contrast, the currency exchange rate method involves a variety of international and domestic financial forces that often have little relation to domestic output. In developing countries with weak currencies the exchange rate estimate of GDP in dollars is typically one-fourth to one-half the PPP estimate. Furthermore, exchange rates may suddenly go up or down by 10% or more because of market forces or official fiat whereas real output has remained unchanged. On 12 January 1994, for example, the 14 countries of the African Financial Community (whose currencies are tied to the French franc) devalued their currencies by 50%. This move, of course, did not cut the real output of these countries by half. One important caution: the proportion of, say, defense expenditures as a percentage of GDP in local currency accounts may differ substantially from the proportion when GDP accounts are expressed in PPP terms, as, for example, when an observer tries to estimate the dollar level of Russian or Japanese military expenditures. Note: the numbers for GDP and other economic data cannot be chained together from successive volumes of the Factbook because of changes in the US dollar measuring rod, revisions of data by statistical agencies, use of new or different sources of information, and changes in national statistical methods and practices.

The world bank:

GNI, Atlas method (current US$)

Definition: GNI (formerly GNP) is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad. Data are in current U.S. dollars. GNI, calculated in national currency, is usually converted to U.S. dollars at official exchange rates for comparisons across economies, although an alternative rate is used when the official exchange rate is judged to diverge by an exceptionally large margin from the rate actually applied in international transactions. To smooth fluctuations in prices and exchange rates, a special Atlas method of conversion is used by the World Bank. This applies a conversion factor that averages the exchange rate for a given year and the two preceding years, adjusted for differences in rates of inflation between the country, and through 2000, the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). From 2001, these countries include the Euro Zone, Japan, the United Kingdom, and the United States.

Source: World Bank national accounts data, and OECD National Accounts data files.

Footnote: On 1 July 1997 China resumed its exercise of sovereignty over Hong Kong; and on 20 December 1999 China resumed its exercise of sovereignty over Macao. Unless otherwise noted, data for China do not include data for Hong Kong, China; Macao, China; or Taiwan, China.

the CIA's is pretty suspicious tho.