The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Tuesday, September 28, 2010

Is Australia growing faster than the GDP data suggests?

There is a very interesting and growing gap in Australia between GDP and GNI. Simply put, GDP is the market value of all output produced in Australia irrespective of who owns the enterprises producing those goods and services, whereas GNI is the value of all output produced globally by exclusively Australian-owned enterprises. Think of GDP as all national income generated in Australia by enterprises owned by both Australians and foreigners whereas GNI is all national income generated in Australia and overseas attributable to Australians only (as opposed to foreigners). The chart below shows the difference in the real growth rates attributable to GNI and GDP over time. You can see the story: GNI growth has outpaced GDP growth significantly over the last two quarters, presumably because of elevated commodity prices.