For those interested in China there is an excellent blog by Patrick Chovanec:
Patrick Chovanec has an approach to economics much like my own – some may distrust and dislike it, but that’s your money and your choice.
In: China Real Estate Unravels
Patrick Chovanec shows his inherent disbelief in “official” figures. It is not because he can’t do the math – on the contrary: It is a man that knows quite a lot about cooking books and tarting up a broken down pile of junk to prepare it for a second hand costumer.
In this he points to some irregularities in the official figures – and suggests they might not be reflecting reality. An old friend – a nuclear physicist once remarked: “Nature is always right – no matter what your figures and calculations show.”
There doesn’t seem to be one single figure for the Chinese real estate market that hasn’t been manipulated, and that gives the thoughtful reader reason to ponder why. Just like a child not telling the truth to the parents and building up to still more momentous contradictions.
In: Bloomberg: Inflated Notions
The Chinese consumer price index is treated with irreverence. Most noticeable are the “official truth merchants” getting shirty.
I have myself tried digging a bit in the Chinese consumer price index and found the same manipulation. The Chinese authorities nowhere explain their methods or the weighting of the different commodities. This makes the informational value of a price index negative.
Any first year student of economics that can’t take an index to spare parts won’t pass exam. Normally authoritative indices are constructed by competent persons, and the public shouldn’t really be bothered with the technical details as the limitations are well known.
Lack of willingness or ability to separate figures into – even major – components does to the jaded eye indicate not incompetence; but ill will.
The shrill and hateful accusations of the “truth mongers” are a further indication of something terribly wrong.
Truth will not necessarily out; but if you know what you are doing as an economist, you can use more primitive methods to check if the story you are told are in the correct ball park – something you should always do. One thing is what the weather man on the news network is telling you; but how about looking out of the window once in a while?
The example with the dearth of taxies is a good example: The supposition that taxi fares are included in the index – and nobody wants to drive taxies despite great demand – well that does lend credence to the claim of official swindle. Why go to such extraordinary trouble if not for some purpose.
Of course these more primitive methods do not have the precision normally presented; but what do you want? To be generally right or precisely wrong?
As any police officer knows:
When explanations get extraordinarily long, precise and irrelevant – then someone is hiding something.
Once I made a complaint about being bumped on bicycle by a car – nothing major; but coming to the station with the twisted remnants of my bike and detailed report the desk sergeant only question was: “Are you allowed to ride a bicycle there?”
“I think so; but when you ask in that way I get uncertain.” That was the right answer. He was testing my veracity.