Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Stock Market Seasonal Trend Analysis - 23rd Oct 19
Gold Prices Stand to Rally on Brexit Delay - 23rd Oct 19
US Stock Markets “Roll Over” On Earnings and Economic Data At Channel Highs - 23rd Oct 19
Yes, Gold “Just Sits There” and That’s Quite a Feat - 23rd Oct 19
Downsizing – What to Watch Out For - 23rd Oct 19
Gold Price Has Not Corrected Enough - 23rd Oct 19
U-Turn or Perfect Storm? Globalization at Crossroads - 22nd Oct 19
Stock Market Indexes Struggle and TRAN suggests a possible top - 22nd Oct 19
Fake Numbers Fueling the Wage War on Wealth - 22nd Oct 19
A Look at Peak Debt - 22nd Oct 19
The Coming Great Global Debt Reset - 22nd Oct 19
GamStop Became Mandatory - 22nd Oct 19
Learn to Spot Reliable Trading Setups: ANY Market, Any Market Time Frame - 21st Oct 19
How To Secure A Debt Consolidation Loan Even If You Have A Bad Credit Rating - 21st Oct 19
Kids Teepee Tent Fun from Amazon by Lavievert Review - 15% Discount! - 21st Oct 19
Stock Market Stalls: Caution Ahead - 21st Oct 19
Stock Market Crash Setup? - 21st Oct 19
More Stock Market Congestion (Distribution) - 21st Oct 19
Revisiting “Black Monday Stock Market Crash October 19 1987 - 21st Oct 19
Land Rover Discovery Sports Out of Warranty Top Money Saving Tips - 21st Oct 19
Investing lessons from the 1987 Stock Market Crash From Who Beat it - 20th Oct 19
Trade Wars: Facts And Fallacies - 20th Oct 19
The Gold Stocks Correction and What Lays Ahead - 19th Oct 19
Gold during Global Monetary Ease - 19th Oct 19
US Treasury Bonds Pause Near Resistance Before The Next Rally - 18th Oct 19
The Biggest Housing Boom in US History Has Just Begun - 18th Oct 19
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Ireland’s Bogus 26% GDP Economic Boost

Economics / Economic Statistics Jul 16, 2016 - 12:06 PM GMT

By: MISES

Economics

Jonathan Newman writes: Ireland’s Central Statistics Office updated their 2015 national income figures and revealed a staggering 26.3% increase in real GDP from 2014 to 2015.

Paul Krugman called it “leprechaun economics.”

Joseph Salerno said “that’s unbelievable!”


I say it’s just one more reason to doubt official macroeconomic statistics.

While some initially responded with accusations of duplicitous methods, the CSO assures that the figures were calculated using the standard EU accounting rules, including the reported 34.4% increase in exports and 87.3% increase in industry (!) over the same time period.

The culprit is the large number of corporate inversions and mergers that legally shuffle ownership of taxable revenues and assets to Ireland, where lower tax rates and other laws allow companies like Google keep 94% of their non-US profits from government theft. For comparison, official US corporate tax rates range from 15%–39%, so it’s no wonder why some might prefer to travel on a road with fewer highway robberies.

While many commentators are using this as an opportunity to denounce legal tax avoidance, the main lesson here is that official national income accounting statistics do not portray what many take them to portray.

Most use GDP or GDP per capita to measure how wealthy the citizens of some nation are, how their wealth changes over time, or how wealthy they are compared to other nations. But these applications are spurious for many reasons—no one would say that the average Irish citizen is now 26% wealthier because some multinational corporations filled out some paperwork. No one would say that Ireland actually experienced real economic growth on the order of 26.3%.

What’s more, the large part of the 26% boost to Ireland’s statistics is only possible through a decrease in other countries’ statistics, which calls their data into question, too. Though a few large companies transferring taxable items from the US to Ireland might be a drop in the bucket for the US and a big splash in Ireland, both countries’ GDP figures are going through the same statistical wringer.

In modern times, when the legal ownership of firms and bank accounts can dart across the globe with a simple signature or a press of a button, national income statistics are becoming increasingly meaningless. The problem isn't the globalization, the tax avoidance, or the technology that makes such transfers possible. The problem lies in the figures themselves and their exultation by mainstream economists.

Jonathan Newman is a 2013 Summer Fellow at the Mises Institute and teaches economics at Auburn University. See Jonathan Newman's article archives.

http://mises.org

© 2016 Copyright Jonathan Newman - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules