It’s not distorted, they’re just two different metrics to measure two different things and to offer different perspectives on something as complex as a nations economy
It is distorted when we’re talking about growth. Nominal GDP would show that China’s economy hasn’t grown when their growth has been staggering. It’s only masked because of China’s deliberate currency manipulation.
A currency left to float is a different matter because that currency would reflect its true market value.
Currency manipulator is just an illusory term coined by the Feds to namecall countries who have the audacity to utilize the full extent of their financial arsenal to drive economic growth, while they use the same tricks
“It has been argued that the concept of "currency manipulation" is hypocritical, given that the US already has the privilege of having the main reserve currency of the world, which is needed for international trade. Massive interventions of the Federal Reserve since the 2008 financial crisis, such as Quantitative Easing and interventions in the REPO market have been cited as alleged examples of the U.S. itself engaging in currency manipulation.” -Wiki
Yeah, sorry, I didn’t mean to use currency manipulator in a negative way. It’s just a fact that they manipulate their currency for economic gain. They’re will within their right as a sovereign nation in charge of its own currency to do so.
The US throwing a tantrum over it is their own pejorative.
But I bring it up because it does have impacts on nominal GDP readings and artificially deflates it which is why you get these nonsense articles sometimes claiming China has stagnated because their nominal GDP hasn’t grown much since 2020 compared to the US.
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u/Grehjin 3d ago
It’s not distorted, they’re just two different metrics to measure two different things and to offer different perspectives on something as complex as a nations economy