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To: Joe S Pack who wrote (64554)	6/3/2005 1:02:04 PM
From: energyplay	Read Replies (1) \| Respond to of 74559

Hi Joe - I certainly agree that most US Goevernment numger are sloppy, stupid and/ or corrupt. EIA does well in all three categories on energy inventory numbers, especially for natural gas, with at least two mysterious "corrections" each year. You may have seen my posts on the flaws in reported personal savings rate - two big numbers subtracted to get a small number, and the absense of capital gains on the income side. But first, why would the IEEE have its own number ? They needed another way to spend members dues ? Not that they couldn't do a better job, but why would they ? JP Morgan might develop their own numbers, or Wal-Mart, or OECD. You sure you want to take the IEEE number (really the Spectrum article ) against anything the US Government reports....:-) Here's the methodology behind the IEEE numbers, with some of the caveats- *********** In the Economy category, GDP dollar estimates for all countries are derived from purchasing power parity (PPP) calculations rather than from conversions at official currency exchange rates. The PPP method involves the use of standardized international dollar price weights, which are applied to the quantities of final goods and services produced in a given economy. The data derived from the PPP method provide the best available starting point for comparisons of economic strength and well-being between countries. The division of a GDP estimate in domestic currency by the corresponding PPP estimate in dollars gives the PPP conversion rate. Whereas PPP estimates for OECD countries are quite reliable, PPP estimates for developing countries are often rough approximations. Most of the GDP estimates are based on extrapolation of PPP numbers published by the UN International Comparison Program (UNICP) and by Professors Robert Summers and Alan Heston of the University of Pennsylvania and their colleagues. In contrast, the currency exchange rate method involves a variety of international and domestic financial forces that often have little relation to domestic output. In developing countries with weak currencies the exchange rate estimate of GDP in dollars is typically one-fourth to one-half the PPP estimate. Furthermore, exchange rates may suddenly go up or down by 10% or more because of market forces or official fiat whereas real output has remained unchanged. On 12 January 1994, for example, the 14 countries of the African Financial Community (whose currencies are tied to the French franc) devalued their currencies by 50%. This move, of course, did not cut the real output of these countries by half. One important caution: the proportion of, say, defense expenditures as a percentage of GDP in local currency accounts may differ substantially from the proportion when GDP accounts are expressed in PPP terms, as, for example, when an observer tries to estimate the dollar level of Russian or Japanese military expenditures. Note: the numbers for GDP and other economic data cannot be chained together from successive volumes of the Factbook because of changes in the US dollar measuring rod, revisions of data by statistical agencies, use of new or different sources of information, and changes in national statistical methods and practices. *************