| <https://tinyurl.com/23w4qab8> tabletmag.com
|
| Remember the claims that Russia's economy was more or less irrelevant,
| merely the equivalent of a small, not very impressive European country?
| .. Seldom has the West so grossly misjudged an economy's global
| significance .. The war in Ukraine has "made us realize that the Russian
| economy is considerably more important than what we thought." ..
|
| If you compare Russia's .. GDP .. by simply converting it from rubles
| into U.S. dollars, you indeed get an economy the size of Spain's. But
| such a comparison makes no sense without adjusting for purchasing power
| parity (PPP), which accounts for productivity and standards of living ..
| And when you measure Russia's GDP based on PPP, it's clear that Russia's
| economy is actually more like the size of Germany's .. Not a negligible
| difference ..
|
| .. Also .. the service sector today is grossly overvalued compared with
| the industrial sector and commodities like oil, gas, copper, and
| agricultural products. If we reduce the proportional importance of
| services in the global economy, .. [then] "Russia's economy is vastly
| larger than that of Germany ..
|
| This makes intuitive sense. When push comes to shove, we know there is
| more value in providing people with the things they really need to
| survive like food and energy than there is in intangible things like
| entertainment or financial services. When a company like Netflix has a
| price-earnings ratio three times higher than that of Nestle, the world's
| largest food company, it's more likely than not a reflection of market
| froth than of physical reality ..
|
| The size and importance of Russia's economy is further distorted by
| ignoring global trade flows .. Oil .. wheat .. nickel .. semi-finished
| iron .. platinum .. frozen fishes .. Such commanding importance in the
| production of so many essential commodities means that Russia .. is in
| many respects a linchpin of the globalized production chain ..

Looks like some rethinking in the traditional Western views.

The article also presents some considerations about China's economy.

| .. we may have to consider that in a very real and relevant way, the
| Chinese economy accounts for something like 25% - 30% of the global
| economy on a PPP basis, rather than the current estimates of 18%-19% ..