Q4 2023 GDP, 50 States & DC

[Shawn]

As for using GDP per capita to compare the wealth of individuals from different countries, it's a flawed logic - but more so because it deals with means instead of medians, and medians far more accurately capture what we're trying to compare here.

PPP has its own flaws: the weightings are assumed, universal, and means-based. Spending habits vary from country to country, both in terms of which staples are purchased and at what ratios. People in Country A spend relatively more on car fuel and less on rice than people in Country B as a percentage of their overall spending, but PPP weightings assume universal spending ratios. And we're dealing with averages (means) again, not medians. PPP also doesn't account for taxes, fees, unofficial costs (bribes, etc.), it's just looking at the pricing of staple goods and trying to find equilibrium between two currencies.

Which introduces more flaws you've got to keep in mind: sometimes currencies trade temporarily at artificially high or low rates due to policy choices, not true market demand. The yen is artificially weak now because until two weeks ago, the BoJ kept central rates negative - the only OECD market to do this, making Japan wildly out of step with the rest of the world's major economies. This was done to drive inflation (something we actually need in Japan and hadn't experienced in close to 30 years), as opposed to curbing inflation like US monetary policy has been concurrently trying to do. It doesn't matter that Japan's underlying economic health is now better than it's been in two decades, with record wage increases and a booming stock market: which fiat are you gonna plow into, one with negative rates or one paying out 5.5+%?