Backdoor Economics

I was always interested in the different ways by which economists check the growth of an economy. Traditionally you measure it by calculating GDP, however accounting errors or erroneous assumptions can result in inaccurate measurements. Or in the case of China, political pressure to "make" GDP growth a certain number. But by measuring other things you can check the "official" GDP figures to see if they're legit.

For example, Alan Greenspan (if I recall correctly) liked to look at rail road ties and repairs and the more the economy grew, the more goods were being produced and thus the railways of our nation were further worn.

But another simple, but ingenious way of going about checking economic growth figures is electricity usage. This should be in direct relation to GDP.



Originally I had misread the chart as I assumed electric useage was falling behin GDP growth, but then Zephyr pointed out to me that there are two scales and that electric use has actually EXCEEDED official GDP reports. GDP is growing around 11-12% while electric use has been between 12-16%.

China may be growing even faster than you previously thought.