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Implementing US GDP in Chained Prices for Cross-country GDP Growth and Sectoral Comparisons : Application to Selected ASEAN Countries

Author

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  • Jesus C. Dumagan

    (PIDS)

Abstract
GDP in constant prices of ASEAN countries suffers from substitution bias by ignoring relative price changes and makes GDP growth and shares dependent on the base year. These analytical deficiencies led the US since the mid-1990s to convert GDP from constant to chained prices. Thus, cross-country comparisons in constant prices are analytically shaky even with the same base year. Therefore, this paper implements US GDP in chained prices in Indonesia, Malaysia, Philippines, and Thailand to alleviate substitution bias and prevent baseyear dependence of GDP growth and shares for valid cross-country comparisons. Converting UN GDP data from constant 1990 prices to chained prices affected Malaysia and the Philippines more than Indonesia and Thailand. Shares of GDP level during 2002-06 show Malaysias industry sector expanded (43.6 to 47.6 percent) while its service sector shrunk (49.1 to 43.7 percent). In the Philippines, the agriculture sector shrunk (19.2 to 14.7 percent) while the service sector expanded (48.6 to 53.6 percent). Shares of GDP growth during 2002-06 show the industry sector drove Thailands GDP growth, contributing around 54 percent, while the service sector drove GDP growth in Indonesia, Malaysia, and in the Philippines, contributing around 49, 49, and 60 percent, respectively, before and after conversion.

Suggested Citation

  • Jesus C. Dumagan, 2008. "Implementing US GDP in Chained Prices for Cross-country GDP Growth and Sectoral Comparisons : Application to Selected ASEAN Countries," Macroeconomics Working Papers 22631, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:macroe:22631
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    References listed on IDEAS

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    1. repec:bla:revinw:v:48:y:2002:i:2:p:217-33 is not listed on IDEAS
    2. repec:phd:pjdevt:jpd_1992_vol__xix_no__1-b is not listed on IDEAS
    3. J. C. Dumagan & V. E. Ball, 2009. "Decomposing growth in revenues and costs into price, quantity and total factor productivity contributions," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 2943-2953.
    4. Jesus C. Dumagan, 2008. "Avoiding Anomalies of GDP in Constant Prices by Conversion to Chained Prices," Macroeconomics Working Papers 22632, East Asian Bureau of Economic Research.
    5. Dumagan, Jesus C., 2008. "Avoiding Anomalies of GDP in Constant Prices by Conversion to Chained Prices: Accentuating Shifts in Philippine Economic Transformation," Discussion Papers DP 2008-24, Philippine Institute for Development Studies.
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    Cited by:

    1. Jesus C. Dumagan, 2010. "Computing Additive Chained Volume Measures of GDP Subaggregates," Macroeconomics Working Papers 23094, East Asian Bureau of Economic Research.

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    More about this item

    Keywords

    Real GDP; constant prices; chained prices; Fisher index;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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