Sep 24, 2022Liked by Joseph Politano

Amazingly comprehensive analysis of the discrepancies between GDP and GDI and thanks for your hard work!

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Hi Joseph,

super informative article, thank you! I am trying to get to the 665B annlualized number but not sure how. I see wages and salaries in the Q2 GDP report for 11,108.4 (in billions). So do I need to come up with 10,441 (in billions) from CES establishment data somehow?

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Help me understand.

Suppose we had a firm with $100 in sales, and it reported $80 in expenses and $40 in profits. There would be a statistical discrepancy of $20 by which income exceeds sales.

It might be the case that the firm's measure of expenses includes $15 in bonuses that are not included in somebody else's measure of the firm's expenses. That is interesting, but I don't see how it explains the statistical discrepancy. Unless you are saying that the $15 in bonuses is exaggerated and that it will be revised away, so that expenses will turn out to be $65 and the statistical discrepancy will be reduced that way.

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