Public-sector Prices > private-sector ?

Discussion in 'Economy' started by Widdekind, Jun 23, 2012.

  1. Widdekind
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    Widdekind Member

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    Planet-wide, from the Penn World Tables (v.7), i obtained the sector-specific price-levels, for 190 countries, in 2005. Tentatively, overall, country price-levels do tend to trend together, so that countries having higher Public-sector prices also have higher private-sector prices. But, Public-sector prices increase much more than private-sector prices. Inexpertly, Public-sector prices may tend to inflate all prices in countries' economies; as Public-sector prices rise, they may tend to drag up private-sector prices. In the priciest countries, Public-sector prices exceed private-sector prices by 50% (as they do in the US):

    [​IMG]
    (the outliers in the upper-left are Caribbean countries (Bermuda, Cuba, Antigua & Baruda; outliers in the lower-right are generally Middle Eastern countries)

    For the US, under Pres. Bush the younger, net corporate taxes plummeted; private-sector price-levels fell, relative to the rest of the US economy; and so real private-sector outputs rose, more than indicated by dividing investment (I) by the overall price-level (P). Thus, under Bush, US real GDP was about 7% higher than revealed, from use of the cruder, single statistic, overall general economy-wide price-level. US markets have, apparently, since "corrected"

    [​IMG]
     

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