Purchasing power parity

619:, expressed in international dollars. These national poverty lines are converted to international currency and the global line is converted back to local currency using the PPP exchange rates from the ICP. PPP exchange rates include data from the sales of high end non-poverty related items which skews the value of food items and necessary goods which is 70 percent of poor peoples' consumption. Angus Deaton argues that PPP indices need to be reweighted for use in poverty measurement; they need to be redefined to reflect local poverty measures, not global measures, weighing local food items and excluding luxury items that are not prevalent or are not of equal value in all localities. 651:

instability in the peaceful time (and that is what the abandoning of the gold standard during the war was blamed for). Gustav Cassel was among those who supported the idea of restoring the gold standard, although with some alterations. The question, which Gustav Cassel tried to answer in his works written during that period, was not how exchange rates are determined in the free market, but rather how to determine the appropriate level at which exchange rates were to be fixed during the restoration of the system of fixed exchange rates.

529:, falling into the second category, and drifting from the PPP exchange rate to the currency exchange rate. Even if the PPP "value" of the Ethiopian currency is three times stronger than the currency exchange rate, it will not buy three times as much of internationally traded goods like steel, cars and microchips, but non-traded goods like housing, services ("haircuts"), and domestically produced crops. The relative price differential between tradables and non-tradables from high-income to low-income countries is a consequence of the 1459: 569:

costs increase, the larger the range of exchange rate fluctuations. The same is true for official trade restrictions because the customs fees affect importers' profits in the same way as shipping fees. According to Krugman and Obstfeld, "Either type of trade impediment weakens the basis of PPP by allowing the purchasing power of a given currency to differ more widely from country to country." They cite the example that a dollar in London should purchase the same goods as a dollar in Chicago, which is certainly not the case.

97:, that is, many goods with different quantities. PPP then computes an inflation and exchange rate as the ratio of the price of the basket in one location to the price of the basket in the other location. For example, if a basket consisting of 1 computer, 1 ton of rice, and half a ton of steel was 1000 US dollars in New York and the same goods cost 6000 HK dollars in Hong Kong, the PPP exchange rate would be 6 HK dollars for every 1 US dollar. 1404: 639:. While Gustav Cassel's use of PPP concept has been traditionally interpreted as his attempt to formulate a positive theory of exchange rate determination, the policy and theoretical context in which Cassel wrote about exchange rates suggests different interpretation. In the years immediately preceding the end of WWI and following it economists and politicians were involved in discussions on possible ways of restoring the 2038: 2553: 557:

countries have more labor relative to capital, so marginal productivity of labor is greater in rich countries than in poor countries. Nontradables tend to be labor-intensive; therefore, because labor is less expensive in poor countries and is used mostly for nontradables, nontradables are cheaper in poor countries. Wages are high in rich countries, so nontradables are relatively more expensive.

1604:, however, each iPad is produced in the same place (except for the model sold in Brazil) and all iPads (within the same model) have identical performance characteristics. Price differences are therefore a function of transportation costs, taxes, and the prices that may be realized in individual markets. In 2013, an iPad cost about twice as much in Argentina as in the United States. 1328: 363:

market exchange rate is artificially weak. In such cases, a PPP exchange rate is likely the most realistic basis for economic comparison. Similarly, when exchange rates deviate significantly from their long term equilibrium due to speculative attacks or carry trade, a PPP exchange rate offers a better alternative for comparison.

1519:

exchange rate is 3.58 HK$ per US$ . The difference between this and the actual exchange rate of 7.83 suggests that the Hong Kong dollar is 54.2% undervalued. That is, it is cheaper to convert US dollars into Hong Kong dollars and buy a Big Mac in Hong Kong than it is to buy a Big Mac directly in US dollars.

451:"bridging" methods, which do not fully take into account differing quality between goods, it may serve to overstate the PPP basis of poorer countries, because the price indexing on which PPP is based will assign to poorer countries the greater weight of goods consumed in greater shares in richer countries. 1151: 1518:

uses The Big Mac Index to identify overvalued and undervalued currencies. That is, ones where the Big Mac is expensive or cheap, when measured using current exchange rates. The January 2019 article states that a Big Mac costs HK$ 20.00 in Hong Kong and US$ 5.58 in the United States. The implied PPP

544:

The corporate cost advantage is nothing more sophisticated than access to cheaper workers, but because the pay of those workers goes farther in low-income countries than high, the relative pay differentials (inter-country) can be sustained for longer than would be the case otherwise. (This is another

450:

Linking regions presents another methodological difficulty. In the 2005 ICP round, regions were compared by using a list of some 1,000 identical items for which a price could be found for 18 countries, selected so that at least two countries would be in each region. While this was superior to earlier

1503:

There are some problems with the Big Mac Index. A Big Mac is perishable and not easily transported. That means the law of one price is not likely to keep prices the same in different locations. McDonald's restaurants are not present in every country, which limits the index's usage. Moreover, Big

654:

His recommendation was to fix exchange rates at the level corresponding to the PPP, as he believed that this would prevent trade imbalances between trading nations. Thus, PPP doctrine proposed by Cassel was not really a positive (descriptive) theory of exchange rate determination (as Cassel was

193:

of the exchange rates computed for individual goods. The EKS-S method (by Éltető, Köves, Szulc, and Sergeev) uses two different baskets, one for each country, and then averages the result. While these methods work for 2 countries, the exchange rates may be inconsistent if applied to 3 countries, so

602:

Measurement of price levels differ from country to country. Inflation data from different countries are based on different commodity baskets; therefore, exchange rate changes do not offset official measures of inflation differences. Because it makes predictions about price changes rather than price

472:

The IMF considers that GDP in purchase-power-parity (PPP) terms is not the most appropriate measure for comparing the relative size of countries to the global economy, because PPP price levels are influenced by nontraded services, which are more relevant domestically than globally. The IMF believes

345:

assumes that the exchange rate between two currencies actually observed in the different international markets is the one that is used in the purchasing power parity comparisons, so that the same amount of goods could actually be purchased in either currency with the same beginning amount of funds.

317:

measured in dollars will also halve. However, this exchange rate results from international trade and financial markets. It does not necessarily mean that Mexicans are poorer by a half; if incomes and prices measured in pesos stay the same, they will be no worse off assuming that imported goods are

572:

Nontradables are primarily services and the output of the construction industry. Nontradables also lead to deviations in PPP because the prices of nontradables are not linked internationally. The prices are determined by domestic supply and demand, and shifts in those curves lead to changes in the

568:

The law of one price is weakened by transport costs and governmental trade restrictions, which make it expensive to move goods between markets located in different countries. Transport costs sever the link between exchange rates and the prices of goods implied by the law of one price. As transport

556:

The Bhagwati–Kravis–Lipsey view provides a somewhat different explanation from the Balassa–Samuelson theory. This view states that price levels for nontradables are lower in poorer countries because of differences in endowment of labor and capital, not because of lower levels of productivity. Poor

405:

Thus, it is necessary to make adjustments for differences in the quality of goods and services. Furthermore, the basket of goods representative of one economy will vary from that of another: Americans eat more bread; Chinese more rice. Hence a PPP calculated using the US consumption as a base will

1511:

In the white paper, "Burgernomics", the authors computed a correlation of 0.73 between the Big Mac Index's prices and prices calculated using the Penn World Tables. This single-good index captures most, but not all, of the effects captured by more professional (and more complex) PPP measurement.

417:

For example, in 2005 the price of a gallon of gasoline in Saudi Arabia was US$ 0.91, and in Norway the price was US$ 6.27. The significant differences in price would not contribute to accuracy in a PPP analysis, despite all of the variables that contribute to the significant differences in price.

89:

for a particular good, then the price for that good should be the same at every location. Ideally, a computer in New York and in Hong Kong should have the same price. If its price is 500 US dollars in New York and the same computer costs 2,000 HK dollars in Hong Kong, PPP theory says the exchange

362:

PPP exchange rates are especially useful when official exchange rates are artificially manipulated by governments. Countries with strong government control of the economy sometimes enforce official exchange rates that make their own currency artificially strong. By contrast, the currency's black

650:

The stability of exchange rates was widely believed to be crucial for restoring the international trade and for its further stable and balanced growth. Nobody then was mentally prepared for the idea that flexible exchange rates determined by market forces do not necessarily cause chaos and

252:

If one country's GDP is converted into the other country's currency using PPP exchange rates instead of observed market exchange rates, the false inference will not occur. Essentially GDP measured at PPP controls for the different costs of living and price levels, usually relative to the United

581:

Linkages between national price levels are also weakened when trade barriers and imperfectly competitive market structures occur together. Pricing to market occurs when a firm sells the same product for different prices in different markets. This is a reflection of inter-country differences in

111:

The value of the PPP exchange rate is very dependent on the basket of goods chosen. In general, goods are chosen that might closely obey the law of one price. Thus, one attempts to select goods which are traded easily and are commonly available in both locations. Organizations that compute PPP

321:

Measuring income in different countries using PPP exchange rates helps to avoid this problem, as the metrics give an understanding of relative wealth regarding local goods and services at domestic markets. On the other hand, it is poor for measuring the relative cost of goods and services in

1499:

The Big Mac has the value of being a relatively standardized consumer product that includes input costs from a wide range of sectors in the local economy, such as agricultural commodities (beef, bread, lettuce, cheese), labor (blue and white collar), advertising, rent and real estate costs,

322:

international markets. The reason is it does not take into account how much US$ 1 stands for in a respective country. Using the above-mentioned example: in an international market, Mexicans can buy less than Americans after the fall of their currency, though their GDP PPP changed a little.

691:

According to the table, an American living or travelling in Switzerland on an income denominated in US dollars would find that country to be the most expensive of the group, having to spend 27% more US dollars to maintain a standard of living comparable to the US in terms of

443:, because teff is not commercially available in Thailand and rice is not in Ethiopia, so the price of rice in Ethiopia or teff in Thailand cannot be determined. As a general rule, the more similar the price structure between countries, the more valid the PPP comparison. 397:

may be greater than the difference in housing prices, while also less than the difference in entertainment prices. People in different countries typically consume different baskets of goods. It is necessary to compare the cost of baskets of goods and services using a

1552:

For example, the average price of KFC's Original 12 pc. Bucket in the United States in January 2016 was $ 20.50; while in Namibia it was only $ 13.40 at market exchange rates. Therefore, the index states the Namibian dollar was undervalued by 33% at that time.

354:. Theories that invoke purchasing power parity assume that in some circumstances a fall in either currency's purchasing power (a rise in its price level) would lead to a proportional decrease in that currency's valuation on the foreign exchange market. 225:

and consumption and other places where the prices of non-traded goods are considered important. (Market exchange rates are used for individual goods that are traded). PPP rates are more stable over time and can be used when that attribute is important.

1141:

Since global PPP estimates—such as those provided by the ICP—are not calculated annually, but for a single year, PPP exchange rates for years other than the benchmark year need to be extrapolated. One way of doing this is by using the country's

655:

perfectly aware of numerous factors that prevent exchange rates from stabilizing at PPP level if allowed to float), but rather a normative (prescriptive) policy advice, formulated in the context of discussions on returning to the gold standard.

330:

PPP exchange rates are never valued because market exchange rates tend to move in their general direction, over a period of years. There is some value to knowing in which direction the exchange rate is more likely to shift over the long run.

432:(ICP), which PPP estimates are based on, require the disaggregation of national accounts into production, expenditure or (in some cases) income, and not all participating countries routinely disaggregate their data into such categories. 413:

there is no way to reduce complexity to a single number that is equally satisfying for all purposes. Nevertheless, PPPs are typically robust in the face of the many problems that arise in using market exchange rates to make comparisons.

1323:{\displaystyle {\textrm {PPPrate}}_{X,i}={\frac {{\textrm {PPPrate}}_{X,b}\cdot {\frac {{\textrm {GDPdef}}_{X,i}}{{\textrm {GDPdef}}_{X,b}}}}{{\textrm {PPPrate}}_{U,b}\cdot {\frac {{\textrm {GDPdef}}_{U,i}}{{\textrm {GDPdef}}_{U,b}}}}}} 687:

to exchange rates. The OECD table below indicates the number of US dollars needed in each of the countries listed to buy the same representative basket of consumer goods and services that would cost US$ 100 in the United States.

545:

way of saying that the wage rate is based on average local productivity and that this is below the per capita productivity that factories selling tradable goods to international markets can achieve.) An equivalent

130:

are more stable and are less affected by tariffs, they are used for many international comparisons, such as comparing countries' GDPs or other national income statistics. These numbers often come with the label

446:

PPP levels will also vary based on the formula used to calculate price matrices. Possible formulas include GEKS-Fisher, Geary-Khamis, IDB, and the superlative method. Each has advantages and disadvantages.

241:

fluctuate substantially, when the GDP of one country measured in its own currency is converted to the other country's currency using market exchange rates, one country might be inferred to have higher

93:

Poverty, tariffs, transportation, and other frictions prevent the trading and purchasing of various goods, so measuring a single good can cause a large error. The PPP term accounts for this by using a

406:

differ from that calculated using China as a base. Additional statistical difficulties arise with multilateral comparisons when (as is usually the case) more than two countries are to be compared.

1545:

Original 12/15 pc. bucket. The Big Mac Index cannot be used for most countries in Africa because most do not have a McDonald's restaurant. Thus, the KFC Index was created by Sagaci Research (a

409:

Various ways of averaging bilateral PPPs can provide a more stable multilateral comparison, but at the cost of distorting bilateral ones. These are all general issues of indexing; as with other

1584:

in United States. The implied exchange rate is 0.71. The difference between this and the actual exchange rate, 0.93 as of Mid November 2021, suggests the CHF is -22.8% undervalued to the USD.

237:

among countries. The same product, for instance, can have a different level of quality and even safety in different countries, and may be subject to different taxes and transport costs. Since

603:

levels, relative PPP is still a useful concept. However, change in the relative prices of basket components can cause relative PPP to fail tests that are based on official price indexes.

573:

market basket of some goods relative to the foreign price of the same basket. If the prices of nontradables rise, the purchasing power of any given currency will fall in that country.

208:

Relative PPP is a weaker statement based on the law of one price, covering changes in the exchange rate and inflation rates. It seems to mirror the exchange rate closer than PPP does.

161:

by purchasing power parity—considerably different from the nominal exchange rate. This discrepancy has large implications; for instance, when converted via the nominal exchange rates,

2866:

provides an overview of methodological issues in calculating PPP and in designing the ICP under which the main PPP tables (Maddison, Penn World Tables, and World Bank WDI) are based.

594:

and segmented markets results in violations of the law of one price and absolute PPP. Over time, shifts in market structure and demand will occur, which may invalidate relative PPP.

590:, whether the existing market for a prospective entrant's product features few suppliers or instead is already near-saturated). According to Krugman and Obstfeld, this occurrence of 65:

that contains a "final product list covers around 3,000 consumer goods and services, 30 occupations in government, 200 types of equipment goods and about 15 construction projects".

428:

In addition to methodological issues presented by the selection of a basket of goods, PPP estimates can also vary based on the statistical capacity of participating countries. The

549:

benefit comes from non-traded goods that can be sourced locally (nearer the PPP-exchange rate than the nominal exchange rate in which receipts are paid). These act as a cheaper

2845: 560:

PPP calculations tend to overemphasise the primary sectoral contribution, and underemphasise the industrial and service sectoral contributions to the economy of a nation.

263:

countries in contrast to non-traded goods, that is, goods produced for home-country use. Also, currencies are traded for purposes other than trade in goods and services,

138:

There can be marked differences between purchasing power adjusted incomes and those converted via market exchange rates. A well-known purchasing power adjustment is the

2187: 2022:(CPI) and purchasing power parity (PPP) conversion factors share conceptual similarities. The CPI measures differences in levels of prices of goods and services over 2590: 2857: 435:

Some aspects of PPP comparison are theoretically impossible or unclear. For example, there is no basis for comparison between the Ethiopian labourer who lives on

680: 2768: 2502:

Kadochnikov, Denis (2013). "Gustav Cassel's purchasing power parity doctrine in the context of his views on international economic policy coordination".

2176: 2338: 2257: 2863: 2885: 2145: 2716: 553:

than is available to factories in richer countries. It is difficult by GDP PPP to consider the different quality of goods among the countries.

1146:. To calculate a country's PPP exchange rate in Geary–Khamis dollars for a particular year, the calculation proceeds in the following manner: 2617: 1573:. Its advantage compared to the Big Mac Index is that Nespresso capsules are sold in higher numbers compared to a single Big Mac hamburger. 1373: 162: 38:

at one location divided by the price of the basket of goods at a different location. The PPP inflation and exchange rate may differ from the

3997: 3953: 2678: 2056: 518:, moving towards the PPP exchange rate. Conversely, category 2 products tend to trade close to the currency exchange rate. (See also 1421: 194:

further adjustment may be necessary so that the rate from currency A to B times the rate from B to C equals the rate from A to C.

2410: 684: 2199: 57:(GDP), labour productivity and actual individual consumption, and in some cases to analyse price convergence and to compare the 2161: 2116: 2067: 245:

than the other country in one year but lower in the other. Both of these inferences would fail to reflect the reality of their

2893: 1569:

Index measures PPP with a basket that contains a single product: An Arpeggio flavored coffee pod produced and retailed by the

2860:

Good report on purchasing power containing a Big Mac index as well as for staples such as bread and rice for 71 world cities.

2783: 2474: 123:) can contribute to longer-term differences between the two rates. One use of PPP is to predict longer-term exchange rates. 3001: 2924: 2061: 402:. This is a difficult task because purchasing patterns and even the goods available to purchase differ across countries. 2649: 2339:"China's rise, America's demise | beyondbrics | News and views on emerging markets from the Financial Times – FT.com" 1443: 4032: 2598: 2072: 683:(OECD) measures the differences in price levels between its member countries by calculating the ratios of PPPs for 669: 429: 203: 119:

because it reacts to changes in demand at each location. Also, tariffs and differences in the price of labour (see

2817: 389:

Estimation of purchasing power parity is complicated by the fact that countries do not simply differ in a uniform

4027: 189:

There are variations in calculating PPP. The EKS method (developed by Ö. Éltető, P. Köves and B. Szulc) uses the

2387: 2228: 3435: 2764: 2051: 1425: 2835: 533:

and gives a big cost advantage to labour-intensive production of tradable goods in low income countries (like

3405: 3395: 3088: 2043: 615:, referred to as the dollar-a-day line. This line represents an average of the national poverty lines of the 120: 3616: 3555: 3528: 2342: 2265: 530: 3982: 3963: 3540: 3385: 3351: 3336: 3315: 3310: 478: 465: 26:) is a measure of the price of specific goods in different countries and is used to compare the absolute 3957: 3533: 3223: 3213: 2136: 2026:

within a country, whereas PPPs measure the change in levels of prices across regions within a country.

1376:

says, "Our reference basket of goods is based on European consumer habits and includes 122 positions".

644: 104:

comes from the idea that, with the right exchange rate, consumers in every location will have the same

4022: 3103: 1505: 1487: 499:

Local, non-tradable goods and services (like electric power) that are produced and sold domestically.

382:

The PPP exchange-rate calculation is controversial because of the difficulties of finding comparable

2826: 3987: 3933: 3676: 3631: 3470: 3341: 3218: 421:

When PPP comparisons are to be made over some interval of time, proper account needs to be made of

3691: 2624: 2411:

Price indexes, inequality, and the measurement of world poverty Angus Deaton, Princeton University

495:

The goods that the currency has the "power" to purchase are a basket of goods of different types:

177:

nominal GDP per capita is around US$ 53,242, but its PPP figure is US$ 46,602, in line with other

3641: 3475: 3465: 3455: 3445: 3183: 3173: 3133: 3123: 2996: 2917: 2749: 1597: 1414: 693: 616: 591: 139: 2793:. Joint World Bank – OECD Seminar on Purchasing Power Parities. Agenda item n° 4. Archived from 2287: 3811: 3656: 3516: 3459: 3415: 3378: 3128: 3068: 3043: 3013: 2986: 514:

The more that a product falls into category 1, the further its price will be from the currency

335: 314: 222: 54: 2694: 2462: 418:

More comparisons have to be made and used as variables in the overall formulation of the PPP.

4037: 3943: 3626: 3601: 3586: 3560: 3499: 3178: 3118: 3098: 3093: 346:

Depending on the particular theory, purchasing power parity is assumed to hold either in the

2320: 3992: 3696: 3440: 3410: 3363: 3326: 3252: 3203: 3168: 3108: 3073: 3008: 2991: 2019: 1581: 550: 238: 170: 116: 2941: 371: 8: 3922: 3731: 3550: 3450: 3430: 3390: 3346: 3331: 3287: 3228: 3153: 3143: 3113: 3036: 1549:

firm focusing solely on Africa) to identify over- and under-valued currencies in Africa.

628: 3591: 3023: 3977: 3948: 3906: 3711: 3420: 3400: 3368: 3282: 3277: 3257: 3208: 3148: 3138: 3083: 3078: 2910: 2827:

Purchasing power parities updated by Organisation of Cooperation and Development (OECD)

2519: 2465:. In Reinert, Kenneth A.; Rajan, Ramkishen S.; Glass, Amy Jocelyn; et al. (eds.). 2443: 1496:

in 1986 as a way to teach economics and to identify over- and under-valued currencies.

611:

The global poverty line is a worldwide count of people who live below an international

455: 290:

The PPP method is used as an alternative to correct for possible statistical bias. The

234: 53:

The purchasing power parity indicator can be used to compare economies regarding their

115:

The PPP exchange rate may not match the market exchange rate. The market rate is more

4047: 3841: 3816: 3726: 3606: 3494: 3297: 3233: 3198: 3188: 3058: 2869: 2686: 2523: 2470: 2203: 287:

can influence the purchasing power parity of a country in the international markets.

178: 112:

exchange rates use different baskets of goods and can come up with different values.

61:

between places. The calculation of the PPP, according to the OECD, is made through a

3766: 2784:"Integration of CPI and PPP: Methodological Issues, Feasibility and Recommendations" 2158: 253:

States dollar, enabling a more accurate estimate of a nation's level of production.

3891: 3836: 3821: 3806: 3791: 3721: 3701: 3681: 3636: 3243: 3193: 3163: 3158: 3048: 2974: 2890: 2538: 2511: 2435: 2302: 291: 105: 82: 78: 47: 27: 3771: 2794: 4002: 3896: 3861: 3826: 3761: 3686: 3671: 3565: 3521: 3358: 3292: 3267: 3262: 3238: 2969: 2954: 2897: 2839: 2821: 2568: 2515: 2165: 2159:

2005 World Development Indicators: Table 5.7 | Relative prices and exchange rates

1546: 482: 460: 338: 299: 280: 1458: 4042: 3916: 3901: 3866: 3851: 3831: 3801: 3621: 3272: 2981: 2949: 2733: 1372:

The bank UBS produces its "Prices and Earnings" report every three years. The

454:

There are a number of reasons that different measures do not perfectly reflect

257: 190: 58: 3651: 4016: 3881: 3871: 3846: 3786: 3781: 3776: 3756: 3746: 3716: 3706: 3611: 3511: 3484: 3248: 2879: 2846:

Purchasing power parities as example of international statistical cooperation

2690: 2306: 1593: 1562: 1534: 1492: 1482:

is a simple implementation of PPP where the basket contains a single good: a

1479: 1393: 1345: 640: 632: 515: 383: 367: 272: 268: 127: 94: 86: 39: 35: 157:

estimated that in 2003, one Geary–Khamis dollar was equivalent to about 1.8

3911: 3856: 3751: 3741: 3736: 3661: 3506: 3031: 2959: 1143: 612: 306: 284: 2657: 3886: 3876: 3666: 3545: 3489: 2964: 1577: 538: 519: 410: 399: 394: 390: 295: 276: 173:

1,965 while on a PPP basis, it is about US$ 7,197. At the other extreme,

1384:

To teach PPP, the basket of goods is often simplified to a single good.

3796: 3596: 3373: 2873: 2814: 2603: 2447: 1428: in this section. Unsourced material may be challenged and removed. 586:, virtually no demand for pork in Islamic states) and the supply side ( 151: 3646: 3576: 2933: 1566: 1538: 1528: 1465: 1340:

is the PPP exchange rate of country X for the benchmark year, PPPrate

503: 422: 351: 310: 271:

whose prices vary more than those of physical goods. Also, different

77:

term for measuring prices at different locations. It is based on the

74: 2851: 2591:"Chapter 18: Extrapolating PPPs and Comparing ICP Benchmark Results" 2439: 2423: 1570: 1403: 3425: 2832: 2469:. Vol. I. Princeton: Princeton University Press. p. 942. 534: 526: 347: 242: 158: 31: 481:

spokeperson, Webber, Jude (2011). China's rise, America's demise.

1601: 1483: 1462: 507: 230: 174: 294:

is a widely cited source of PPP adjustments, and the associated

233:

but exclude profits and above all do not consider the different

2566: 2497: 2495: 2493: 2117:"Purchasing Power Parities - Frequently Asked Questions (FAQs)" 2037: 1356:

is the GDP deflator of country X for the benchmark year, GDPdef

43: 2110: 2108: 2106: 2746: 1469: 631:

in the 16th century, and was developed in its modern form by

221:

Purchasing power parity exchange rate is used when comparing

166: 2902: 2490: 1600:) compares an item's price in various locations. Unlike the 2735:

23rd Sep 2013, CommSec Economic Insight: CommSec iPad Index

2103: 1541:

measures PPP with a basket that contains a single item: a

546: 440: 436: 2188:

List of countries by future GDP (PPP) per capita estimates

1542: 1336:

is the PPP exchange rate of country X for year i, PPPrate

597: 2650:"Our Big Mac index shows how burger prices are changing" 1490:

restaurants. The index was created and popularized by

525:

More processed and expensive products are likely to be

473:

that GDP at market rates is a more relevant comparison.

372:

identify manipulation of inflation numbers by Argentina

2854:

provides PPP estimates for a large number of countries

1364:

is the GDP deflator of the US for the benchmark year.

681:

Organisation for Economic Co-operation and Development

318:

not essential to the quality of life of individuals.

1154: 2864:"Understanding PPPs and PPP based national accounts" 2392:

Carnegie Council for Ethics in International Affairs

2371: 2094: 2033: 1360:

is the GDP deflator of the US for year i, and GDPdef

302:

in using exchange rates to outputs among countries.

2504:

European Journal of the History of Economic Thought

1352:

is the GDP deflator of country X for year i, GDPdef

576: 506:that can be sold on the international market (like 90:rate should be 4 HK dollars for every 1 US dollar. 2569:"Purchasing power parities – measurement and uses" 2177:List of countries by past and future GDP (nominal) 2135: 1322: 643:, which would automatically restore the system of 563: 256:The exchange rate reflects transaction values for 2717:"Is the Aussie too expensive? iPad index says no" 2388:"Policy Innovations Digital Magazine (2006–2016)" 2285: 1576:For example, 1 basic Nespresso Capsule costs 0.5 34:. PPP is effectively the ratio of the price of a 4014: 2891:Purchasing power parity Converter (PPP Converter 2567:Paul Schreyer; Francette Koechlin (March 2002). 2424:"Abnormal Deviations in International Exchanges" 1348:(US) for the benchmark year (equal to 1), GDPdef 674: 2765:"Here's How Much An iPad Costs In 46 Countries" 2467:The Princeton Encyclopedia of the World Economy 2286:Taylor and Taylor, Alan and Mark (Fall 2004). 2222: 2220: 386:to compare purchasing power across countries. 2918: 490: 2870:List of Countries by Purchasing Power Parity 2833:Explanations from the U. of British Columbia 2454: 2134:Daneshkhu, Scheherazade (18 December 2007). 2852:World Bank International Comparison Project 2791:Recent Advances in Methods and Applications 2714: 2501: 2376:. Pearson Education, Inc. pp. 394–395. 2217: 357: 325: 2925: 2911: 2367: 2365: 2363: 2361: 2359: 2090: 2088: 2064:, Includes IMF ranked PPP of 186 countries 1136: 637:The Present Situation of the Foreign Trade 537:), as against high income countries (like 2588: 2133: 2057:List of countries by GDP (PPP) per capita 1444:Learn how and when to remove this message 2842:(also provides daily updated PPP charts) 1457: 16:Measure of prices in different countries 2858:UBS's "Prices and Earnings" Report 2006 2762: 2356: 2085: 1504:Macs are not sold at every McDonald's ( 4015: 2460: 2421: 2255: 2137:"China, India economies '40% smaller'" 2068:Measures of national income and output 606: 598:Differences in price level measurement 502:Tradable goods such as non-perishable 2906: 685:private final consumption expenditure 2848:from Eurostat – Statistics Explained 2618:"Prices and Earnings (Edition 2012)" 2288:"The Purchasing Power Parity Debate" 1426:adding citations to reliable sources 1397: 582:conditions on both the demand side ( 439:with the Thai labourer who lives on 3002:Agent-based computational economics 2062:List of IMF ranked countries by GDP 1508:), which limits its usage further. 81:, which says that, if there are no 13: 2781: 2771:from the original on Oct 23, 2023. 2671: 2554:"Monthly comparative price levels" 2539:"Monthly comparative price levels" 1556: 14: 4059: 2808: 2715:Glenda Kwek (23 September 2013). 2226: 305:For example, if the value of the 155:World Development Indicators 2005 3460:neoclassical–Keynesian synthesis 2599:International Comparison Program 2422:Cassel, Gustav (December 1918). 2295:Journal of Economic Perspectives 2148:from the original on 2022-12-10. 2114: 2073:Relative purchasing power parity 2036: 1596:, the iPad index (elaborated by 1402: 1387: 1344:is the PPP exchange rate of the 670:List of countries by price level 577:Departures from free competition 430:International Comparison Program 204:Relative purchasing power parity 2775: 2756: 2740: 2727: 2708: 2642: 2610: 2582: 2560: 2545: 2530: 2415: 2404: 2380: 2331: 2313: 2279: 1413:needs additional citations for 663: 564:Trade barriers and nontradables 197: 2767:. Business Insider Australia. 2763:Liz Tay (September 23, 2013). 2249: 2236:St. Louis Federal Reserve Bank 2192: 2181: 2170: 2152: 2127: 2052:List of countries by GDP (PPP) 2014: 1379: 458:. In 2011, interviewed by the 343:purchasing power parity theory 309:falls by half compared to the 73:Purchasing power parity is an 1: 3396:Critique of political economy 2932: 2372:Krugman and Obstfeld (2009). 2256:Politi, Daniel (2011-11-24). 2095:Krugman and Obstfeld (2009). 2078: 2044:Business and economics portal 1587: 675:OECD comparative price levels 647:among participating nations. 627:The idea originated with the 247:relative levels of production 216: 184: 2656:. 2023-08-03. Archived from 2516:10.1080/09672567.2013.824999 2341:. 2011-05-29. Archived from 2258:"Argentina's Big Mac Attack" 1522: 393:; rather, the difference in 7: 2029: 658: 479:International Monetary Fund 10: 4064: 3534:Real business-cycle theory 1526: 1391: 667: 622: 491:Range and quality of goods 350:or, more strongly, in the 201: 68: 3974: 3932: 3574: 3308: 3057: 3022: 2940: 2463:"purchasing power parity" 2461:Cheung, Yin-Wong (2009). 2099:. Pearson Education, Inc. 617:world's poorest countries 464:, a spokesperson for the 377: 121:Balassa–Samuelson theorem 2884:Purchasing power parity 2307:10.1257/0895330042632744 1472:, are similar worldwide. 531:Balassa–Samuelson effect 358:Identifying manipulation 326:Exchange rate prediction 229:PPP exchange rates help 211: 4033:International economics 3174:Industrial organization 2997:Computational economics 2750:Commonwealth Securities 2374:International Economics 2097:International Economics 1580:in Switzerland and 0.7 1137:Extrapolating PPP rates 592:product differentiation 102:purchasing power parity 20:Purchasing power parity 4028:Gross domestic product 3379:Modern monetary theory 3044:Experimental economics 3014:Pluralism in economics 2987:Mathematical economics 2541:. OECD. 14 April 2015. 2202:. OECD. Archived from 1997:United States (no tax) 1473: 1367: 1324: 488: 315:gross domestic product 55:gross domestic product 2623:. UBS. Archived from 1500:transportation, etc. 1468:, like this one from 1461: 1325: 470: 239:market exchange rates 3253:Social choice theory 3009:Behavioral economics 2992:Complexity economics 2428:The Economic Journal 2020:Consumer price index 1422:improve this article 1152: 645:fixed exchange rates 551:factor of production 283:or interventions by 148:international dollar 40:market exchange rate 3337:American (National) 3037:Economic statistics 2679:"The Big Mac index" 2321:"Global gas prices" 629:School of Salamanca 607:Global poverty line 223:national production 140:Geary–Khamis dollar 2896:2023-07-12 at the 2886:Definition, Unesco 2838:2019-08-11 at the 2820:2017-10-20 at the 2551:as of 25 May 2024 2536:as of 14 Apr 2015 2164:2007-02-23 at the 1474: 1320: 456:standard of living 30:of the countries' 4010: 4009: 3541:New institutional 2880:The Big Mac Index 2753:23 September 2013 2630:on 26 August 2019 2556:. OECD. May 2024. 2476:978-0-691-12812-2 2012: 2011: 1669:Canada (Montréal) 1610:Country or region 1454: 1453: 1446: 1318: 1315: 1300: 1280: 1255: 1246: 1231: 1211: 1186: 1160: 1134: 1133: 710:Price level 2024 705:Price level 2015 179:developed nations 83:transaction costs 48:transaction costs 4055: 4023:Purchasing power 3214:Natural resource 3049:Economic history 2975:Mechanism design 2927: 2920: 2913: 2904: 2903: 2815:Penn World Table 2802: 2801: 2800:on Aug 12, 2022. 2799: 2788: 2782:D., Rao (2001). 2779: 2773: 2772: 2760: 2754: 2744: 2738: 2731: 2725: 2724: 2712: 2706: 2705: 2703: 2702: 2693:. Archived from 2675: 2669: 2668: 2666: 2665: 2646: 2640: 2639: 2637: 2635: 2629: 2622: 2614: 2608: 2607: 2595: 2586: 2580: 2579: 2576:Statistics Brief 2573: 2564: 2558: 2557: 2549: 2543: 2542: 2534: 2528: 2527: 2510:(6): 1101–1121. 2499: 2488: 2487: 2485: 2483: 2458: 2452: 2451: 2434:(112): 413–415. 2419: 2413: 2408: 2402: 2401: 2399: 2398: 2384: 2378: 2377: 2369: 2354: 2353: 2351: 2350: 2335: 2329: 2328: 2327:. 23 March 2005. 2317: 2311: 2310: 2292: 2283: 2277: 2276: 2274: 2273: 2264:. Archived from 2253: 2247: 2246: 2244: 2242: 2233: 2227:Pakko, Michael. 2224: 2215: 2214: 2212: 2211: 2196: 2190: 2185: 2179: 2174: 2168: 2156: 2150: 2149: 2139: 2131: 2125: 2124: 2112: 2101: 2100: 2092: 2046: 2041: 2040: 1607: 1606: 1506:notably in India 1449: 1442: 1438: 1435: 1429: 1406: 1398: 1329: 1327: 1326: 1321: 1319: 1317: 1316: 1314: 1313: 1302: 1301: 1298: 1294: 1293: 1282: 1281: 1278: 1274: 1269: 1268: 1257: 1256: 1253: 1248: 1247: 1245: 1244: 1233: 1232: 1229: 1225: 1224: 1213: 1212: 1209: 1205: 1200: 1199: 1188: 1187: 1184: 1179: 1174: 1173: 1162: 1161: 1158: 699: 698: 679:Each month, the 486: 384:baskets of goods 298:reflects such a 292:Penn World Table 235:quality of goods 106:purchasing power 79:law of one price 28:purchasing power 4063: 4062: 4058: 4057: 4056: 4054: 4053: 4052: 4013: 4012: 4011: 4006: 4003:Business portal 3970: 3969: 3968: 3928: 3692:von Böhm-Bawerk 3580: 3579: 3570: 3342:Ancient thought 3320: 3319: 3313: 3304: 3303: 3302: 3053: 3018: 2970:Contract theory 2955:Decision theory 2936: 2931: 2898:Wayback Machine 2840:Wayback Machine 2822:Wayback Machine 2811: 2806: 2805: 2797: 2786: 2780: 2776: 2761: 2757: 2745: 2741: 2732: 2728: 2713: 2709: 2700: 2698: 2677: 2676: 2672: 2663: 2661: 2648: 2647: 2643: 2633: 2631: 2627: 2620: 2616: 2615: 2611: 2593: 2589:Paul McCarthy. 2587: 2583: 2571: 2565: 2561: 2552: 2550: 2546: 2537: 2535: 2531: 2500: 2491: 2481: 2479: 2477: 2459: 2455: 2440:10.2307/2223329 2420: 2416: 2409: 2405: 2396: 2394: 2386: 2385: 2381: 2370: 2357: 2348: 2346: 2337: 2336: 2332: 2319: 2318: 2314: 2290: 2284: 2280: 2271: 2269: 2254: 2250: 2240: 2238: 2231: 2225: 2218: 2209: 2207: 2198: 2197: 2193: 2186: 2182: 2175: 2171: 2166:Wayback Machine 2157: 2153: 2142:Financial Times 2132: 2128: 2113: 2104: 2093: 2086: 2081: 2042: 2035: 2032: 2017: 1989:US (California) 1677:Canada (no tax) 1616: 1614: 1590: 1559: 1557:Nespresso Index 1547:market research 1533:Similar to the 1531: 1525: 1476: 1475: 1450: 1439: 1433: 1430: 1419: 1407: 1396: 1390: 1382: 1370: 1363: 1359: 1355: 1351: 1343: 1339: 1335: 1303: 1297: 1296: 1295: 1283: 1277: 1276: 1275: 1273: 1258: 1252: 1251: 1250: 1249: 1234: 1228: 1227: 1226: 1214: 1208: 1207: 1206: 1204: 1189: 1183: 1182: 1181: 1180: 1178: 1163: 1157: 1156: 1155: 1153: 1150: 1149: 1139: 711: 706: 677: 672: 666: 661: 625: 609: 600: 579: 566: 493: 487: 483:Financial Times 477: 461:Financial Times 380: 360: 339:economic theory 328: 300:systematic bias 219: 214: 206: 200: 187: 95:basket of goods 71: 63:basket of goods 17: 12: 11: 5: 4061: 4051: 4050: 4045: 4040: 4035: 4030: 4025: 4008: 4007: 4005: 4000: 3995: 3990: 3985: 3980: 3975: 3972: 3971: 3967: 3966: 3961: 3951: 3946: 3940: 3939: 3938: 3936: 3930: 3929: 3927: 3926: 3919: 3914: 3909: 3904: 3899: 3894: 3889: 3884: 3879: 3874: 3869: 3864: 3859: 3854: 3849: 3844: 3839: 3834: 3829: 3824: 3819: 3814: 3809: 3804: 3799: 3794: 3789: 3784: 3779: 3774: 3769: 3764: 3759: 3754: 3749: 3744: 3739: 3734: 3729: 3724: 3719: 3714: 3709: 3704: 3699: 3694: 3689: 3684: 3679: 3674: 3669: 3664: 3659: 3654: 3649: 3644: 3639: 3634: 3629: 3624: 3619: 3614: 3609: 3604: 3599: 3594: 3589: 3583: 3581: 3575: 3572: 3571: 3569: 3568: 3563: 3558: 3553: 3548: 3543: 3538: 3537: 3536: 3526: 3525: 3524: 3514: 3509: 3504: 3503: 3502: 3492: 3487: 3482: 3481: 3480: 3479: 3478: 3468: 3463: 3448: 3443: 3438: 3433: 3428: 3423: 3418: 3413: 3408: 3406:Disequilibrium 3403: 3398: 3393: 3388: 3383: 3382: 3381: 3371: 3366: 3361: 3356: 3355: 3354: 3344: 3339: 3334: 3329: 3323: 3321: 3309: 3306: 3305: 3301: 3300: 3295: 3290: 3285: 3280: 3275: 3270: 3265: 3260: 3255: 3246: 3241: 3236: 3231: 3226: 3221: 3219:Organizational 3216: 3211: 3206: 3201: 3196: 3191: 3186: 3181: 3176: 3171: 3166: 3161: 3156: 3151: 3146: 3141: 3136: 3131: 3126: 3121: 3116: 3111: 3106: 3101: 3096: 3091: 3086: 3081: 3076: 3071: 3065: 3064: 3063: 3061: 3055: 3054: 3052: 3051: 3046: 3041: 3040: 3039: 3028: 3026: 3020: 3019: 3017: 3016: 3011: 3006: 3005: 3004: 2994: 2989: 2984: 2982:Macroeconomics 2979: 2978: 2977: 2972: 2967: 2962: 2957: 2950:Microeconomics 2946: 2944: 2938: 2937: 2930: 2929: 2922: 2915: 2907: 2901: 2900: 2888: 2882: 2877: 2867: 2861: 2855: 2849: 2843: 2830: 2829:from OECD data 2824: 2810: 2809:External links 2807: 2804: 2803: 2774: 2755: 2739: 2726: 2707: 2685:. 2019-01-10. 2670: 2641: 2609: 2581: 2559: 2544: 2529: 2489: 2475: 2453: 2414: 2403: 2379: 2355: 2330: 2312: 2301:(4): 135–158. 2278: 2248: 2229:"Burgernomics" 2216: 2191: 2180: 2169: 2151: 2126: 2102: 2083: 2082: 2080: 2077: 2076: 2075: 2070: 2065: 2059: 2054: 2048: 2047: 2031: 2028: 2016: 2013: 2010: 2009: 2006: 2002: 2001: 1998: 1994: 1993: 1990: 1986: 1985: 1982: 1981:United Kingdom 1978: 1977: 1974: 1970: 1969: 1966: 1962: 1961: 1958: 1954: 1953: 1950: 1946: 1945: 1942: 1938: 1937: 1934: 1930: 1929: 1926: 1922: 1921: 1918: 1914: 1913: 1910: 1906: 1905: 1902: 1898: 1897: 1894: 1890: 1889: 1886: 1882: 1881: 1878: 1874: 1873: 1870: 1866: 1865: 1862: 1858: 1857: 1854: 1850: 1849: 1846: 1842: 1841: 1838: 1834: 1833: 1830: 1826: 1825: 1822: 1818: 1817: 1814: 1810: 1809: 1806: 1802: 1801: 1798: 1794: 1793: 1790: 1786: 1785: 1782: 1778: 1777: 1774: 1770: 1769: 1766: 1762: 1761: 1758: 1754: 1753: 1750: 1746: 1745: 1742: 1738: 1737: 1734: 1730: 1729: 1726: 1722: 1721: 1718: 1714: 1713: 1710: 1706: 1705: 1702: 1701:Czech Republic 1698: 1697: 1694: 1690: 1689: 1686: 1682: 1681: 1678: 1674: 1673: 1670: 1666: 1665: 1662: 1658: 1657: 1654: 1650: 1649: 1646: 1642: 1641: 1638: 1634: 1633: 1630: 1626: 1625: 1622: 1618: 1617: 1611: 1589: 1586: 1558: 1555: 1527:Main article: 1524: 1521: 1456: 1455: 1452: 1451: 1410: 1408: 1401: 1392:Main article: 1389: 1386: 1381: 1378: 1369: 1366: 1361: 1357: 1353: 1349: 1341: 1337: 1333: 1312: 1309: 1306: 1292: 1289: 1286: 1272: 1267: 1264: 1261: 1243: 1240: 1237: 1223: 1220: 1217: 1203: 1198: 1195: 1192: 1177: 1172: 1169: 1166: 1138: 1135: 1132: 1131: 1128: 1125: 1121: 1120: 1117: 1114: 1113:United Kingdom 1110: 1109: 1106: 1103: 1099: 1098: 1095: 1092: 1088: 1087: 1084: 1081: 1077: 1076: 1073: 1070: 1066: 1065: 1062: 1059: 1055: 1054: 1051: 1048: 1044: 1043: 1040: 1037: 1033: 1032: 1029: 1026: 1022: 1021: 1018: 1015: 1011: 1010: 1007: 1004: 1000: 999: 996: 993: 989: 988: 985: 982: 978: 977: 974: 971: 967: 966: 963: 960: 956: 955: 952: 949: 945: 944: 941: 938: 934: 933: 930: 927: 923: 922: 919: 916: 912: 911: 908: 905: 901: 900: 897: 894: 890: 889: 886: 883: 879: 878: 875: 872: 868: 867: 864: 861: 857: 856: 853: 850: 846: 845: 842: 839: 835: 834: 831: 828: 824: 823: 820: 817: 813: 812: 809: 806: 802: 801: 798: 795: 794:Czech Republic 791: 790: 787: 784: 780: 779: 776: 773: 769: 768: 765: 762: 758: 757: 754: 751: 747: 746: 743: 740: 736: 735: 732: 729: 725: 724: 721: 718: 714: 713: 708: 703: 676: 673: 665: 662: 660: 657: 624: 621: 608: 605: 599: 596: 578: 575: 565: 562: 512: 511: 500: 492: 489: 475: 379: 376: 359: 356: 327: 324: 313:, the Mexican 273:interest rates 269:capital assets 218: 215: 213: 210: 202:Main article: 199: 196: 191:geometric mean 186: 183: 163:GDP per capita 128:exchange rates 87:trade barriers 70: 67: 59:cost of living 15: 9: 6: 4: 3: 2: 4060: 4049: 4046: 4044: 4041: 4039: 4036: 4034: 4031: 4029: 4026: 4024: 4021: 4020: 4018: 4004: 4001: 3999: 3996: 3994: 3991: 3989: 3986: 3984: 3981: 3979: 3976: 3973: 3965: 3962: 3959: 3955: 3952: 3950: 3947: 3945: 3942: 3941: 3937: 3935: 3931: 3925: 3924: 3920: 3918: 3915: 3913: 3910: 3908: 3905: 3903: 3900: 3898: 3895: 3893: 3890: 3888: 3885: 3883: 3880: 3878: 3875: 3873: 3870: 3868: 3865: 3863: 3860: 3858: 3855: 3853: 3850: 3848: 3845: 3843: 3840: 3838: 3835: 3833: 3830: 3828: 3825: 3823: 3820: 3818: 3815: 3813: 3810: 3808: 3805: 3803: 3800: 3798: 3795: 3793: 3790: 3788: 3785: 3783: 3780: 3778: 3775: 3773: 3770: 3768: 3765: 3763: 3760: 3758: 3755: 3753: 3750: 3748: 3745: 3743: 3740: 3738: 3735: 3733: 3730: 3728: 3725: 3723: 3720: 3718: 3715: 3713: 3710: 3708: 3705: 3703: 3700: 3698: 3695: 3693: 3690: 3688: 3685: 3683: 3680: 3678: 3675: 3673: 3670: 3668: 3665: 3663: 3660: 3658: 3655: 3653: 3650: 3648: 3645: 3643: 3640: 3638: 3635: 3633: 3630: 3628: 3625: 3623: 3620: 3618: 3615: 3613: 3610: 3608: 3605: 3603: 3600: 3598: 3595: 3593: 3590: 3588: 3587:de Mandeville 3585: 3584: 3582: 3578: 3573: 3567: 3564: 3562: 3559: 3557: 3554: 3552: 3549: 3547: 3544: 3542: 3539: 3535: 3532: 3531: 3530: 3529:New classical 3527: 3523: 3520: 3519: 3518: 3515: 3513: 3510: 3508: 3505: 3501: 3498: 3497: 3496: 3493: 3491: 3488: 3486: 3485:Malthusianism 3483: 3477: 3474: 3473: 3472: 3469: 3467: 3464: 3461: 3457: 3454: 3453: 3452: 3449: 3447: 3446:Institutional 3444: 3442: 3439: 3437: 3434: 3432: 3429: 3427: 3424: 3422: 3419: 3417: 3414: 3412: 3409: 3407: 3404: 3402: 3399: 3397: 3394: 3392: 3389: 3387: 3384: 3380: 3377: 3376: 3375: 3372: 3370: 3367: 3365: 3362: 3360: 3357: 3353: 3350: 3349: 3348: 3345: 3343: 3340: 3338: 3335: 3333: 3330: 3328: 3325: 3324: 3322: 3317: 3312: 3307: 3299: 3296: 3294: 3291: 3289: 3286: 3284: 3281: 3279: 3276: 3274: 3271: 3269: 3266: 3264: 3261: 3259: 3256: 3254: 3250: 3249:Public choice 3247: 3245: 3242: 3240: 3237: 3235: 3232: 3230: 3227: 3225: 3224:Participation 3222: 3220: 3217: 3215: 3212: 3210: 3207: 3205: 3202: 3200: 3197: 3195: 3192: 3190: 3187: 3185: 3184:Institutional 3182: 3180: 3177: 3175: 3172: 3170: 3167: 3165: 3162: 3160: 3157: 3155: 3152: 3150: 3147: 3145: 3142: 3140: 3137: 3135: 3134:Expeditionary 3132: 3130: 3127: 3125: 3124:Environmental 3122: 3120: 3117: 3115: 3112: 3110: 3107: 3105: 3102: 3100: 3097: 3095: 3092: 3090: 3087: 3085: 3082: 3080: 3077: 3075: 3072: 3070: 3067: 3066: 3062: 3060: 3056: 3050: 3047: 3045: 3042: 3038: 3035: 3034: 3033: 3030: 3029: 3027: 3025: 3021: 3015: 3012: 3010: 3007: 3003: 3000: 2999: 2998: 2995: 2993: 2990: 2988: 2985: 2983: 2980: 2976: 2973: 2971: 2968: 2966: 2963: 2961: 2958: 2956: 2953: 2952: 2951: 2948: 2947: 2945: 2943: 2939: 2935: 2928: 2923: 2921: 2916: 2914: 2909: 2908: 2905: 2899: 2895: 2892: 2889: 2887: 2883: 2881: 2878: 2875: 2871: 2868: 2865: 2862: 2859: 2856: 2853: 2850: 2847: 2844: 2841: 2837: 2834: 2831: 2828: 2825: 2823: 2819: 2816: 2813: 2812: 2796: 2792: 2785: 2778: 2770: 2766: 2759: 2752: 2751: 2747: 2743: 2737: 2736: 2730: 2722: 2718: 2711: 2697:on 2019-07-01 2696: 2692: 2688: 2684: 2683:The Economist 2680: 2674: 2660:on 2023-10-16 2659: 2655: 2654:The Economist 2651: 2645: 2626: 2619: 2613: 2606:. p. 29. 2605: 2601: 2600: 2592: 2585: 2577: 2570: 2563: 2555: 2548: 2540: 2533: 2525: 2521: 2517: 2513: 2509: 2505: 2498: 2496: 2494: 2478: 2472: 2468: 2464: 2457: 2449: 2445: 2441: 2437: 2433: 2429: 2425: 2418: 2412: 2407: 2393: 2389: 2383: 2375: 2368: 2366: 2364: 2362: 2360: 2345:on 2011-05-29 2344: 2340: 2334: 2326: 2322: 2316: 2308: 2304: 2300: 2296: 2289: 2282: 2268:on 2019-10-23 2267: 2263: 2259: 2252: 2237: 2230: 2223: 2221: 2206:on 2019-06-24 2205: 2201: 2195: 2189: 2184: 2178: 2173: 2167: 2163: 2160: 2155: 2147: 2143: 2138: 2130: 2122: 2118: 2111: 2109: 2107: 2098: 2091: 2089: 2084: 2074: 2071: 2069: 2066: 2063: 2060: 2058: 2055: 2053: 2050: 2049: 2045: 2039: 2034: 2027: 2025: 2021: 2007: 2004: 2003: 1999: 1996: 1995: 1991: 1988: 1987: 1983: 1980: 1979: 1975: 1972: 1971: 1967: 1964: 1963: 1959: 1956: 1955: 1951: 1948: 1947: 1943: 1940: 1939: 1935: 1932: 1931: 1927: 1924: 1923: 1919: 1916: 1915: 1911: 1908: 1907: 1903: 1900: 1899: 1895: 1892: 1891: 1887: 1884: 1883: 1879: 1876: 1875: 1871: 1868: 1867: 1863: 1860: 1859: 1855: 1852: 1851: 1847: 1844: 1843: 1839: 1836: 1835: 1831: 1828: 1827: 1823: 1820: 1819: 1815: 1812: 1811: 1807: 1804: 1803: 1799: 1796: 1795: 1791: 1788: 1787: 1783: 1780: 1779: 1775: 1772: 1771: 1767: 1764: 1763: 1759: 1756: 1755: 1751: 1748: 1747: 1743: 1740: 1739: 1735: 1732: 1731: 1727: 1724: 1723: 1719: 1716: 1715: 1711: 1708: 1707: 1703: 1700: 1699: 1695: 1692: 1691: 1687: 1684: 1683: 1679: 1676: 1675: 1671: 1668: 1667: 1663: 1660: 1659: 1655: 1652: 1651: 1647: 1644: 1643: 1639: 1636: 1635: 1631: 1628: 1627: 1623: 1620: 1619: 1612: 1609: 1608: 1605: 1603: 1599: 1595: 1594:Big Mac Index 1585: 1583: 1579: 1574: 1572: 1568: 1564: 1563:Big Mac Index 1554: 1550: 1548: 1544: 1540: 1536: 1535:Big Mac Index 1530: 1520: 1517: 1516:The Economist 1513: 1509: 1507: 1501: 1497: 1495: 1494: 1493:The Economist 1489: 1485: 1481: 1480:Big Mac Index 1471: 1467: 1464: 1460: 1448: 1445: 1437: 1427: 1423: 1417: 1416: 1411:This section 1409: 1405: 1400: 1399: 1395: 1394:Big Mac Index 1388:Big Mac Index 1385: 1377: 1375: 1365: 1347: 1346:United States 1332:Where PPPrate 1330: 1310: 1307: 1304: 1290: 1287: 1284: 1270: 1265: 1262: 1259: 1241: 1238: 1235: 1221: 1218: 1215: 1201: 1196: 1193: 1190: 1175: 1170: 1167: 1164: 1147: 1145: 1129: 1126: 1124:United States 1123: 1122: 1118: 1115: 1112: 1111: 1107: 1104: 1101: 1100: 1096: 1093: 1090: 1089: 1085: 1082: 1079: 1078: 1074: 1071: 1068: 1067: 1063: 1060: 1057: 1056: 1052: 1049: 1046: 1045: 1041: 1038: 1035: 1034: 1030: 1027: 1024: 1023: 1019: 1016: 1013: 1012: 1008: 1005: 1002: 1001: 997: 994: 991: 990: 986: 983: 980: 979: 975: 972: 969: 968: 964: 961: 958: 957: 953: 950: 947: 946: 942: 939: 936: 935: 931: 928: 925: 924: 920: 917: 914: 913: 909: 906: 903: 902: 898: 895: 892: 891: 887: 884: 881: 880: 876: 873: 870: 869: 865: 862: 859: 858: 854: 851: 848: 847: 843: 840: 837: 836: 832: 829: 826: 825: 821: 818: 815: 814: 810: 807: 804: 803: 799: 796: 793: 792: 788: 785: 782: 781: 777: 774: 771: 770: 766: 763: 760: 759: 755: 752: 749: 748: 744: 741: 738: 737: 733: 730: 727: 726: 722: 719: 716: 715: 709: 704: 701: 700: 697: 695: 689: 686: 682: 671: 656: 652: 648: 646: 642: 641:gold standard 638: 634: 633:Gustav Cassel 630: 620: 618: 614: 604: 595: 593: 589: 585: 574: 570: 561: 558: 554: 552: 548: 542: 540: 536: 532: 528: 523: 521: 517: 516:exchange rate 509: 505: 501: 498: 497: 496: 484: 480: 474: 469: 467: 463: 462: 457: 452: 448: 444: 442: 438: 433: 431: 426: 424: 419: 415: 412: 411:price indices 407: 403: 401: 396: 392: 387: 385: 375: 373: 369: 368:Big Mac Index 366:In 2011, the 364: 355: 353: 349: 344: 340: 337: 332: 323: 319: 316: 312: 308: 303: 301: 297: 293: 288: 286: 285:central banks 282: 278: 274: 270: 266: 262: 259: 254: 250: 248: 244: 240: 236: 232: 227: 224: 209: 205: 195: 192: 182: 180: 176: 172: 168: 164: 160: 156: 153: 149: 145: 141: 136: 134: 129: 124: 122: 118: 113: 109: 107: 103: 98: 96: 91: 88: 84: 80: 76: 66: 64: 60: 56: 51: 49: 45: 41: 37: 36:market basket 33: 29: 25: 21: 4038:Inequalities 3998:Publications 3954:Publications 3921: 3517:Neoclassical 3507:Mercantilism 3416:Evolutionary 3278:Sociological 3251: / 3149:Geographical 3129:Evolutionary 3104:Digitization 3069:Agricultural 3032:Econometrics 2960:Price theory 2872:since 1990 ( 2795:the original 2790: 2777: 2758: 2748: 2742: 2734: 2729: 2720: 2710: 2699:. Retrieved 2695:the original 2682: 2673: 2662:. Retrieved 2658:the original 2653: 2644: 2632:. Retrieved 2625:the original 2612: 2597: 2584: 2575: 2562: 2547: 2532: 2507: 2503: 2480:. Retrieved 2466: 2456: 2431: 2427: 2417: 2406: 2395:. Retrieved 2391: 2382: 2373: 2347:. Retrieved 2343:the original 2333: 2324: 2315: 2298: 2294: 2281: 2270:. Retrieved 2266:the original 2261: 2251: 2239:. Retrieved 2235: 2208:. Retrieved 2204:the original 2200:"EKS Method" 2194: 2183: 2172: 2154: 2141: 2129: 2120: 2096: 2023: 2018: 1909:South Africa 1615:(US dollars) 1591: 1575: 1571:Nestlé Group 1560: 1551: 1532: 1515: 1514: 1510: 1502: 1498: 1491: 1486:burger from 1477: 1440: 1434:October 2023 1431: 1420:Please help 1415:verification 1412: 1383: 1371: 1331: 1148: 1144:GDP deflator 1140: 690: 678: 664:Professional 653: 649: 636: 635:in 1916, in 626: 613:poverty line 610: 601: 587: 583: 580: 571: 567: 559: 555: 543: 524: 513: 494: 471: 459: 453: 449: 445: 434: 427: 423:inflationary 420: 416: 408: 404: 388: 381: 370:was used to 365: 361: 342: 336:neoclassical 333: 329: 320: 307:Mexican peso 304: 289: 264: 260: 258:traded goods 255: 251: 246: 228: 220: 207: 198:Relative PPP 188: 159:Chinese yuan 154: 152:World Bank's 147: 143: 137: 133:PPP-adjusted 132: 126:Because PPP 125: 114: 110: 101: 99: 92: 72: 62: 52: 46:, and other 23: 19: 18: 3792:von Neumann 3561:Supply-side 3546:Physiocracy 3490:Marginalism 3179:Information 3119:Engineering 3099:Development 3094:Demographic 2965:Game theory 2942:Theoretical 2015:PPP vs. CPI 1941:Switzerland 1917:South Korea 1845:Philippines 1829:New Zealand 1821:Netherlands 1624:$ 1,094.11 1380:Educational 1374:2012 report 1091:Switzerland 1003:New Zealand 992:Netherlands 937:South Korea 783:Costa Rica 712:(US = 100) 707:(US = 100) 694:consumption 539:Switzerland 520:Penn effect 504:commodities 468:declared: 400:price index 395:food prices 391:price level 296:Penn effect 277:speculation 42:because of 4017:Categories 3949:Economists 3822:Schumacher 3727:Schumpeter 3697:von Wieser 3617:von Thünen 3577:Economists 3476:Circuitism 3441:Humanistic 3436:Historical 3411:Ecological 3401:Democratic 3374:Chartalism 3364:Behavioral 3327:Mainstream 3288:Statistics 3283:Solidarity 3204:Managerial 3169:Humanistic 3164:Historical 3109:Ecological 3074:Behavioral 2874:World Bank 2701:2019-07-02 2664:2023-10-17 2604:World Bank 2578:(3). OECD. 2397:2019-09-27 2349:2023-03-22 2272:2019-10-23 2210:2019-08-26 2079:References 1797:Luxembourg 1588:iPad Index 1488:McDonald's 1466:hamburgers 970:Luxembourg 959:Lithuania 668:See also: 217:Conversion 185:Variations 32:currencies 3867:Greenspan 3832:Samuelson 3812:Galbraith 3782:Tinbergen 3722:von Mises 3717:Heckscher 3677:Edgeworth 3556:Stockholm 3551:Socialist 3451:Keynesian 3431:Happiness 3391:Classical 3352:Mutualism 3347:Anarchist 3332:Heterodox 3229:Personnel 3189:Knowledge 3154:Happiness 3144:Financial 3114:Education 3089:Democracy 3024:Empirical 2934:Economics 2691:0013-0613 2634:26 August 2524:154383662 2482:2 October 2325:CNN/Money 2241:24 August 2008:$ 554.08 2000:$ 499.00 1992:$ 546.91 1984:$ 638.81 1976:$ 544.32 1968:$ 656.96 1960:$ 530.72 1952:$ 538.34 1944:$ 617.58 1936:$ 706.87 1928:$ 674.96 1920:$ 576.20 1912:$ 559.38 1904:$ 674.96 1896:$ 674.96 1888:$ 525.98 1885:Singapore 1880:$ 596.08 1872:$ 688.49 1864:$ 704.51 1856:$ 550.00 1848:$ 556.42 1840:$ 655.92 1832:$ 610.45 1824:$ 683.08 1816:$ 591.62 1808:$ 473.77 1800:$ 641.50 1792:$ 501.56 1784:$ 674.96 1776:$ 630.73 1768:$ 512.61 1760:$ 679.64 1752:$ 501.52 1749:Hong Kong 1744:$ 715.54 1736:$ 618.34 1728:$ 688.49 1720:$ 695.25 1712:$ 725.32 1704:$ 676.69 1696:$ 602.52 1688:$ 602.13 1680:$ 467.36 1672:$ 557.18 1664:$ 525.52 1656:$ 791.40 1648:$ 618.34 1640:$ 674.96 1632:$ 506.66 1629:Australia 1621:Argentina 1592:Like the 1567:Nespresso 1561:Like the 1539:KFC Index 1529:KFC Index 1523:KFC Index 1271:⋅ 1202:⋅ 786:*No Data 775:*No Data 772:Colombia 717:Australia 425:effects. 352:short run 311:US dollar 267:, to buy 175:Denmark's 169:is about 144:GK dollar 100:The name 4048:Currency 3978:Category 3958:journals 3944:Glossary 3897:Stiglitz 3862:Rothbard 3842:Buchanan 3827:Friedman 3817:Koopmans 3807:Leontief 3787:Robinson 3672:Marshall 3522:Lausanne 3426:Georgism 3421:Feminist 3369:Buddhist 3359:Austrian 3258:Regional 3234:Planning 3209:Monetary 3139:Feminist 3084:Cultural 3079:Business 2894:Archived 2836:Archived 2818:Archived 2769:Archived 2262:Latitude 2162:Archived 2146:Archived 2030:See also 1957:Thailand 1901:Slovenia 1893:Slovakia 1869:Portugal 1853:Pakistan 1805:Malaysia 1058:Slovenia 1047:Slovakia 1036:Portugal 962:No Data 951:No Data 702:Country 659:Examples 535:Ethiopia 527:tradable 508:diamonds 476:— 348:long run 243:real GDP 117:volatile 75:economic 3993:Outline 3964:Schools 3956: ( 3917:Piketty 3912:Krugman 3777:Kuznets 3767:Kalecki 3742:Polanyi 3632:Cournot 3627:Bastiat 3612:Ricardo 3602:Malthus 3592:Quesnay 3495:Marxian 3386:Chicago 3316:history 3311:Schools 3298:Welfare 3268:Service 3059:Applied 2721:The Age 2448:2223329 2005:Vietnam 1773:Ireland 1757:Hungary 1733:Germany 1717:Finland 1709:Denmark 1645:Belgium 1637:Austria 1602:Big Mac 1598:CommSec 1484:Big Mac 1463:Big Mac 1254:PPPrate 1185:PPPrate 1159:PPPrate 948:Latvia 893:Ireland 882:Iceland 871:Hungary 849:Germany 827:Finland 816:Estonia 805:Denmark 739:Belgium 728:Austria 623:History 281:hedging 261:between 231:costing 150:). The 69:Concept 44:tariffs 3902:Thaler 3882:Ostrom 3877:Becker 3872:Sowell 3852:Baumol 3757:Myrdal 3752:Sraffa 3747:Frisch 3737:Knight 3732:Keynes 3707:Fisher 3702:Veblen 3687:Pareto 3667:Menger 3662:George 3657:Jevons 3652:Walras 3642:Gossen 3566:Thermo 3244:Public 3239:Policy 3194:Labour 3159:Health 2689: 2522: 2473: 2446: 2115:OECD. 1965:Turkey 1949:Taiwan 1933:Sweden 1877:Russia 1861:Poland 1837:Norway 1813:Mexico 1741:Greece 1725:France 1661:Brunei 1653:Brazil 1565:, the 1537:, the 1299:GDPdef 1279:GDPdef 1230:GDPdef 1210:GDPdef 1102:Turkey 1080:Sweden 1025:Poland 1014:Norway 981:Mexico 904:Israel 860:Greece 838:France 750:Canada 378:Issues 341:, the 4043:Trade 3988:Lists 3983:Index 3934:Lists 3907:Hoppe 3892:Lucas 3857:Solow 3847:Arrow 3837:Simon 3802:Lange 3797:Hicks 3772:Röpke 3762:Hayek 3712:Pigou 3682:Clark 3597:Smith 3512:Mixed 3471:Post- 3293:Urban 3273:Socio 3263:Rural 2798:(PDF) 2787:(PDF) 2628:(PDF) 2621:(PDF) 2594:(PDF) 2572:(PDF) 2520:S2CID 2444:JSTOR 2291:(PDF) 2232:(PDF) 1925:Spain 1789:Japan 1781:Italy 1765:India 1693:China 1685:Chile 1613:Price 1470:Japan 1069:Spain 926:Japan 915:Italy 761:Chile 212:Usage 167:India 142:(the 3923:more 3647:Marx 3637:Mill 3622:List 3500:Neo- 3456:Neo- 2687:ISSN 2636:2019 2484:2011 2471:ISBN 2243:2019 2121:OECD 2024:time 1478:The 1130:100 1127:100 1116:121 1097:127 1094:162 1083:109 1017:134 1006:118 995:102 973:112 910:105 907:109 899:104 896:109 888:119 885:111 841:100 830:113 811:105 808:128 753:105 742:101 720:123 588:e.g. 584:e.g. 547:cost 441:rice 437:teff 265:e.g. 171:US$ 85:nor 3887:Sen 3607:Say 3466:New 3199:Law 2512:doi 2436:doi 2303:doi 1973:UAE 1582:USD 1578:CHF 1543:KFC 1424:by 1368:UBS 1362:U,b 1358:U,i 1354:X,b 1350:X,i 1342:U,b 1338:X,b 1334:X,i 1119:95 1108:31 1105:61 1086:87 1075:69 1072:84 1064:66 1061:75 1053:66 1050:63 1042:64 1039:73 1031:51 1028:51 1020:92 1009:93 998:84 987:65 984:66 976:98 965:59 954:64 943:69 940:84 932:69 929:96 921:73 918:94 877:55 874:52 866:63 863:78 855:80 852:94 844:80 833:92 822:74 819:71 800:63 797:59 789:67 778:44 767:52 764:67 756:90 745:84 734:82 731:99 723:96 541:). 522:). 466:IMF 334:In 249:. 165:in 146:or 24:PPP 4019:: 2789:. 2719:. 2681:. 2652:. 2602:. 2596:. 2574:. 2518:. 2508:20 2506:. 2492:^ 2442:. 2432:28 2430:. 2426:. 2390:. 2358:^ 2323:. 2299:18 2297:. 2293:. 2260:. 2234:. 2219:^ 2144:. 2140:. 2119:. 2105:^ 2087:^ 696:. 510:). 374:. 279:, 275:, 181:. 135:. 108:. 50:. 3960:) 3462:) 3458:( 3318:) 3314:( 2926:e 2919:t 2912:v 2876:) 2723:. 2704:. 2667:. 2638:. 2526:. 2514:: 2486:. 2450:. 2438:: 2400:. 2352:. 2309:. 2305:: 2275:. 2245:. 2213:. 2123:. 1447:) 1441:( 1436:) 1432:( 1418:. 1311:b 1308:, 1305:U 1291:i 1288:, 1285:U 1266:b 1263:, 1260:U 1242:b 1239:, 1236:X 1222:i 1219:, 1216:X 1197:b 1194:, 1191:X 1176:= 1171:i 1168:, 1165:X 485:. 22:(

Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.