Comments on: The limits of macroeconomic statistics, Ontario edition

By: mlcan

mlcan — Thu, 17 Nov 2011 20:25:19 +0000

Can you please tell me what the source is for the Ontario data in the second chart? Also, has anything been done to adjust the data in the chart? Thanks for an interesting post.

By: Finster

Finster — Wed, 16 Nov 2011 14:55:32 +0000

It all comes down to GDP being a very poor proxy for wealth and productivity of a society. It’s susceptible to inflation via credit bubbles and the tool of PPP is not granular enough to really capture the cost of living in an area.

Besides GDP is more or less a “delta” of services and production rendered in an area, but captures neither existing infrastructure (the real estate of Rome or Paris) only shows up in building activity, not in substance.

Neither are governance and services captured well. Business threatening levels of litigation actually show up as a plus in GDP, same goes for an inflated but ineffective health care system. Quality of life is not expressed by this measure.

By: canuckA

canuckA — Wed, 16 Nov 2011 10:43:57 +0000

Reforms introduced by the Mulroney government of the early 1990s were supposed to make Canada (the majority of Canadian manufacturing is in Ontario) more competitive. These reforms include the Free Trade Agreement, the federal value added tax and relatively low corporate income tax rates.

Does this report address why these liberal reforms have not had the desired effect; or have the reforms actually worked as intended, but the use of stats has hidden this improved performance?

By: fresnodan

fresnodan — Wed, 16 Nov 2011 10:28:55 +0000

Ask yourself this: why is total GDP reported and not reported as per capita GDP?
Why is the total GDP reported instead of using the GDP deflator?
It is an obvious incentive for both political parties that “GDP is growing” while if you just see what the increase in population does to the mean, it is evident that “we are getting poorer!”
http://www.tradingeconomics.com/united-s tates/gdp-per-capita

By: dneto

dneto — Wed, 16 Nov 2011 02:59:23 +0000

Hope you enjoyed your trip to Toronto.

I’m a Canadian who has turned down job offers in Silicon Valley. Part of my reasoning is that Canada wins big by lowering the cost of failure if I or a loved one gets sick. I can rely on our safety net. I’m rooting for the US to continue its move more equitable health care. (Go single payer go…)

By: Frwip

Frwip — Tue, 15 Nov 2011 22:38:06 +0000

“Ontario isn’t nearly productive or innovative enough.”

Let me guess. The main solutions proposed to make Ontario more productive and innovative involve … tax cuts for corporations and high income earners?

Did I guess right? Did I guess right? Can I have a cookie? Can I have a cookie?

By: topofeatureAM

topofeatureAM — Tue, 15 Nov 2011 21:54:24 +0000

PPP is the correct way to compare stats cross border. I have no idea why you disagree or think using nominal FX rates reveals something PPP does not. Unless your argument is that PPP is different from 1.2, in which case make that argument.

By: Auros

Auros — Tue, 15 Nov 2011 20:53:35 +0000

If only we could get more Americans to understand the Rawlsian thought experiment, or even the basic facts about how income and wealth are distributed here and elsewhere ( http://paul.kedrosky.com/archives/2010/0 9/americans_have.html ), maybe there could be some kind of reasonable discussion about such things.

By: upstater

upstater — Tue, 15 Nov 2011 20:46:43 +0000

As a resident of NY State, with a kid attending university in Ontario and several relatives that are Canadian citizens, I think you conclusions are spot-on.

One only needs to drive through the rot of inner cities in upstate NY or the hollowed-out rural communities and then go across the border to see the difference.

Speaking of the border, the militarized borders are really something for those unfortunate enough to drive or take Amtrak to/from Ontario. But we’re “safer”, right???