<h2>Production of goods vs location of consumption</h2>
<p>GDP measures the production of final goods. Export refers to <em>where</em> the produced goods get consumed. There's no reason to assume that these would be directly related.</p>
<p>A country could be completely isolated (0 exports and 0 imports), so local production/GDP would equal local consumption (accounting for time shift).</p>
<p>One relevance of exports to GDP is the rough equation of <code>Consumption = GDP + Imports - Exports</code> - in a sense, export surplus means that your population is not using part of the GDP to fulfil their needs/wishes right now, but they are traded for financial assets to be used for imports (and thus, consumption) later - or to cover past debts / excess consumption.</p>

CC BY-SA 4.0
2020-07-08T10:19:51.990Z
2020-07-08T10:19:51.990Z
Peteris
<p>I discovered that country ranking by GDP and Exports are <strong>very</strong> different.</p>
<p><a href="https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)" rel="nofollow noreferrer">Largest by GDP</a></p>
<pre><code>1    United States  21,439,453
2    European Union 18,705,132
3    China          14,140,163
</code></pre>
<p><a href="https://en.wikipedia.org/wiki/List_of_countries_by_exports" rel="nofollow noreferrer">Largest by Exports</a></p>
<pre><code>1    European Union 5,624,352
2    China          2,157,000
3    United States  1,576,000
</code></pre>
<p>I wonder why it is so and what would be a better indicator of the country capacity to produce <strong>real goods</strong>.</p>
<p>Like to find countries that have best technology and factories and bet on companies (buy stocks) in that countries.</p>
<p>P.S.</p>
<p>I'm a little bit suspicious about the GDP numbers, because it seems to me (maybe I'm wrong) that' it's kinda virtual and is easier to manipulate, and the export numbers are more or less closer to reality.</p>
<p>Just to highlight a cartoon about GDP</p>
<p><a href="https://i.sstatic.net/6OwaD.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/6OwaD.jpg" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2020-07-06T22:23:14.470Z
(-1), 1. the cartoon is unnecessary and I think it even violates the code of conduct although I will let moderators to judge that. 2. GDP is calculated as Consumption + Investment + Government spending + Export - Minus Imports. There can be a lot that you can criticize about GDP but how can you say that GDP is bad measure and value of exports is a good measure if GDP literary consist of exports and the value of exports is measured in the same way as value of consumption, investment, government spending and imports as they are all part of the same methodology?
1muflon1
CC BY-SA 4.0
2020-07-06T22:27:05.337Z
3. *real* GDP is actually good measure for country's ability to produce goods and services. The problem with GDP is that it does not measure home production or production of enviromental goods and non-market transactions in general. Hence the problem with GDP is that it under-repots certain types of production. When it comes to production that is transacted over market it is very good measure.
1muflon1
CC BY-SA 4.0
2020-07-06T22:45:37.430Z
@1muflon1 thanks, I feel (don't know for sure) that numbers of export is harder to manipulate as it's based on numbers involving 2 countries. While GDP calculated on numbers only from single country (government may want to show higher fake GDP to show good annual growth) and the numbers of credit (investment, government spending) is easier to manipulate than say the real numbers of things you sold to another country.
Alex Craft
CC BY-SA 4.0
2020-07-06T22:52:54.753Z
do you have any source for that other than feeling? 1. outside totalitarian countries like China there is not much suspicion about manipulation of basic statistics.2. there are private companies that calculate/estimate GDP as well sometimes even ahead of government so you can use that for double checking. 3. you can even run statistical analysis to see if the GDP numbers are following zipfian distributions as they should. 4. just because export involves trade that does not make it any harder to manipulate. Each country tracks its own statistics and its not like they double check each other
1muflon1
CC BY-SA 4.0
2020-07-06T23:51:24.443Z
That EU figure is not for a single country: it includes exports from one EU country to another, say Germany to France, while the USA figure does not include exports from California to New York
Henry
<gdp>
Country GDP vs Exports - why such a big difference?
Alex Craft
# Country GDP vs Exports - why such a big difference?

(Asked by: username_0 on 2020-07-06)

I discovered that country ranking by GDP and Exports are **very** different.

[Largest by GDP](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal))

```
1    United States  21,439,453
2    European Union 18,705,132
3    China          14,140,163

```

[Largest by Exports](https://en.wikipedia.org/wiki/List_of_countries_by_exports)

```
1    European Union 5,624,352
2    China          2,157,000
3    United States  1,576,000

```

I wonder why it is so and what would be a better indicator of the country capacity to produce **real goods**.

Like to find countries that have best technology and factories and bet on companies (buy stocks) in that countries.

P.S.

I'm a little bit suspicious about the GDP numbers, because it seems to me (maybe I'm wrong) that' it's kinda virtual and is easier to manipulate, and the export numbers are more or less closer to reality.

Just to highlight a cartoon about GDP

[![enter image description here](https://i.sstatic.net/6OwaD.jpg)](https://i.sstatic.net/6OwaD.jpg)

**Tags:** gdp

> **Comments:**
> **username_1**: (-1), 1. the cartoon is unnecessary and I think it even violates the code of conduct although I will let moderators to judge that. 2. GDP is calculated as Consumption + Investment + Government spending + Export - Minus Imports. There can be a lot that you can criticize about GDP but how can you say that GDP is bad measure and value of exports is a good measure if GDP literary consist of exports and the value of exports is measured in the same way as value of consumption, investment, government spending and imports as they are all part of the same methodology?  
> **username_1**: 3. *real* GDP is actually good measure for country's ability to produce goods and services. The problem with GDP is that it does not measure home production or production of enviromental goods and non-market transactions in general. Hence the problem with GDP is that it under-repots certain types of production. When it comes to production that is transacted over market it is very good measure.  
> **username_0**: @username_1 thanks, I feel (don't know for sure) that numbers of export is harder to manipulate as it's based on numbers involving 2 countries. While GDP calculated on numbers only from single country (government may want to show higher fake GDP to show good annual growth) and the numbers of credit (investment, government spending) is easier to manipulate than say the real numbers of things you sold to another country.  
> **username_1**: do you have any source for that other than feeling? 1. outside totalitarian countries like China there is not much suspicion about manipulation of basic statistics.2. there are private companies that calculate/estimate GDP as well sometimes even ahead of government so you can use that for double checking. 3. you can even run statistical analysis to see if the GDP numbers are following zipfian distributions as they should. 4. just because export involves trade that does not make it any harder to manipulate. Each country tracks its own statistics and its not like they double check each other  
> **username_2**: That EU figure is not for a single country: it includes exports from one EU country to another, say Germany to France, while the USA figure does not include exports from California to New York  

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## 1 answers

### Answer by username_3 on 2020-07-08. Score: 1

## Production of goods vs location of consumption

GDP measures the production of final goods. Export refers to *where* the produced goods get consumed. There's no reason to assume that these would be directly related.

A country could be completely isolated (0 exports and 0 imports), so local production/GDP would equal local consumption (accounting for time shift).

One relevance of exports to GDP is the rough equation of `Consumption = GDP + Imports - Exports` - in a sense, export surplus means that your population is not using part of the GDP to fulfil their needs/wishes right now, but they are traded for financial assets to be used for imports (and thus, consumption) later - or to cover past debts / excess consumption.


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