Research article

Paradox in deviation measure and trap in method improvement—take international comparison as an example

  • Received: 03 June 2021 Accepted: 24 August 2021 Published: 27 August 2021
  • Due to the problem of "true value agnostic" in the measurement of the real world, people believe that the existing methods can be closer to the true value by improving them. Therefore, they are willing to excessively affirm the more advanced method and deny the relatively "traditional" method. Taking the exchange rate method and purchasing power parity method commonly used in international economic comparison as examples, this paper generalizes the problems revealed by the exchange-rate-deviation index and concludes that there are at least three paradoxes in the deviation measurement of different methods. These paradoxes are the paradox of behavior significance, the paradox of comparative object, and the paradox of measurement result. The reason is that there is a cautionary trap in the improvement or innovation of measurement methods in reality. Sometimes the improved method is not necessarily better than the unimproved method. People tend to prefer advanced technology and methodology, but the problem of statistical input and related statistical benefits need to be considered in practical measurement. In fact, these basic problems still exist in some of the methods of economic statistics that we regard as common sense. When learning or introducing new methods, scholars do not absolutize the existing methods and conclusions. They should pay attention to critical experience, avoid the trap of improvement methods, and seek real improvement or innovation.

    Citation: Dong Qiu, Dongju Li. Paradox in deviation measure and trap in method improvement—take international comparison as an example[J]. Quantitative Finance and Economics, 2021, 5(4): 591-603. doi: 10.3934/QFE.2021026

    Related Papers:

  • Due to the problem of "true value agnostic" in the measurement of the real world, people believe that the existing methods can be closer to the true value by improving them. Therefore, they are willing to excessively affirm the more advanced method and deny the relatively "traditional" method. Taking the exchange rate method and purchasing power parity method commonly used in international economic comparison as examples, this paper generalizes the problems revealed by the exchange-rate-deviation index and concludes that there are at least three paradoxes in the deviation measurement of different methods. These paradoxes are the paradox of behavior significance, the paradox of comparative object, and the paradox of measurement result. The reason is that there is a cautionary trap in the improvement or innovation of measurement methods in reality. Sometimes the improved method is not necessarily better than the unimproved method. People tend to prefer advanced technology and methodology, but the problem of statistical input and related statistical benefits need to be considered in practical measurement. In fact, these basic problems still exist in some of the methods of economic statistics that we regard as common sense. When learning or introducing new methods, scholars do not absolutize the existing methods and conclusions. They should pay attention to critical experience, avoid the trap of improvement methods, and seek real improvement or innovation.



    加载中


    [1] Bai MY, Ren RE (2001) Research on international comparison and its methodology. China Soft Sci 1: 107-113.
    [2] Chen MG (2020) Practical Evaluation and Suggestions on China's Participation in the International Comparison Program. J Guizhou Provincial Party School 2: 28-34.
    [3] Chen Y (1993) Purchasing power parity method and its theoretical defects. World Econ Politics 12: 6-10.
    [4] Eastwood MA (2017) Heisenberg's uncertainty principle. QJM: Monthly J Assoc Physicians 110: 335-336.
    [5] Gao MX, Li JP, X J, et al. (2006) System of National Accounts: Principles and China's Practice, Beijing: China Renmin University Press.
    [6] Jin D (2006) Measuring China's Business Cycles. Econ Res J 7: 41-48.
    [7] Ferrari G, Laureti T, Mostacci F (2005) Time-Space Harmonization of Consumer Price Indexes in Euro-Zone Countries. Int Adv Econ Res 4: 359-378. doi: 10.1007/s11294-005-2275-7
    [8] Lv GM (2006) Economic cycle fluctuation: measurement method and China's experience analysis, Doctoral thesis, Dongbei University of Finance and Economics.
    [9] Ma XJ, Liu XY, Wei XX (2016) The Empirical Research of International Comparison Program Based on Purchasing Power Parity Method and Exchange Rate Method: Take China as an Example. China Econ Stat Q 1: 61-73.
    [10] Peihua C (2007) The Value Scale to Unite Volume and Value in International Economic Comparison: Analyzing the Shortage of ICP Methodology of UN. Stat Res 5: 90-92.
    [11] Qiu D (1996) Some Thinking of International Economic Comparison. Stat Res 6: 16-21.
    [12] Qiu D, et al. (2004) The Lady Tasting Tea—How Statistics Revolutionized Science in the Twentieth Century, Translated, Beijing: China Statistics Press.
    [13] Qiu D (2018) The Assumption of Pure Price Ratio Hidden in the BH PPP and its Economic Implications. China Econ Stat Q 2: 38-67.
    [14] Qiu D (2020) The debate between purchasing power parity and market exchange rate in international economic comparison. China Stat 4: 4-6.
    [15] Wang CQ (1993) Research on several issues of the United Nations International Comparison Project (ICP), Doctoral thesis, Dongbei University of Finance and Economics.
    [16] Wang CQ (1995) Empirical Analysis on the deviation of per capita income converted by exchange rate method and ICP method. Res Financ Econ Issues 5: 39-44.
    [17] Wei HQ (2018) The Mechanism and Improvement of the Summary Method of World Bank International Comparison Project: Comment on Measurement Method of Real Scale of World Economy. China Econ Stat Q 2: 245-258.
    [18] Mitchell WC (1913) Business Cycles, Berkeley: University of California Press, 449-450.
    [19] World Bank (2004) World Development Report 2005: A Better Investment Climate for Everyone, Washington, D.C. : Copublication of The World Bank and Oxford University Press.
    [20] Xu Qiang, Chen HC (2017) Comparison Between International Comparison Program and Eurostat-OECD PPP Program. Int Econ Rev 2: 131-143+8.
    [21] Xu XC, Liu WQ (2021) Problems Faced by China in Participating the International Comparison Program. Stat Inf Forum 36: 3-11.
    [22] You SB, Gao Y (2020) Construction Process and Prospect of China's National Economic Accounting System. Stat Decis 36: 10-14.
    [23] Yu FD (1995) Methods, limitations and improvement measures of PPP for international comparison of GDP. Stat Res 1: 67-72.
    [24] Yu FD (2003) Analysis of the discrepancies of the world economic sizes based on PPP and exchange rate estimations. Stat Res 8: 3-7.
    [25] Yu FD (2015) The methodology, the results and the limitations of 2011 ICP round by the World Bank. Stat Res 1: 11-19.
    [26] Ziebart DA (1987) Parity exchange rate deviations and the misvaluation of reported assets under SFAS No. 70. Working Paper, University of Illinois at Urbana-Champaign.
  • Reader Comments
  • © 2021 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
通讯作者: 陈斌, bchen63@163.com
  • 1. 

    沈阳化工大学材料科学与工程学院 沈阳 110142

  1. 本站搜索
  2. 百度学术搜索
  3. 万方数据库搜索
  4. CNKI搜索

Metrics

Article views(1909) PDF downloads(135) Cited by(2)

Article outline

Figures and Tables

Tables(2)

Other Articles By Authors

/

DownLoad:  Full-Size Img  PowerPoint
Return
Return

Catalog