Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

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