PPPs: Purchasing Power or Producing Power Parities?
AbstractThis paper examines the different types of deflators that are used to compare volume estimates of national income and production across countries. It argues that these deflators need to be tailored to the specific income concept used for study. If the potential to spend concept is employed, a purchasing power deflator is needed. If a production based concept is used, a producing power deflator is necessary. The paper argues that present practice produces a hybrid deflator that fails both purposes when terms of trade shifts are large and offers a solution.
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Bibliographic InfoPaper provided by Statistics Canada, Analytical Studies Branch in its series Economic Analysis (EA) Research Paper Series with number 2009058e.
Date of creation: 10 Dec 2009
Date of revision:
Economic accounts; Gross domestic product; Income and expenditure accounts; International trade; Trade patterns;
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- Andrew Sharpe & Vikram Rai, 2013. "Can the Canada-U.S. ICT Gap be a Measurement Issue?," CSLS Research Reports 2013-03, Centre for the Study of Living Standards.
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