IDEAS home Printed from https://ideas.repec.org/p/esj/esridp/153.html
   My bibliography  Save this paper

A PPP Measured Large Economy is Compatible with High Headline Growth Rates? (A High Growth Rate and a Large Discrepancy between the PPP and the Market Exchange Rate)(in Japanese)

Author

Listed:
  • HIROSE Noriki

Abstract

When measured in the purchasing power parity (PPP), China and India are largest economies in the world. They also registered high growth rates these years, combination of the two facts creates significant implications for the future economic relations: The Chinese economy will surpass the U.S. in around ten years from now; The Indian will overtake the Japanese in about five years time, and etc. A simple theoretical reflection on the combinational deduction negates such casual observations. The PPP disproportionately expands the non-trading sector whose growth rates are much slower than those of the trading sector. Therefore, one can compute exact growth rates reflecting new relative proportion of the trading and non-trading sector, and reaches significantly slower overall growth rates than the headline rates. The above conclusion implies two things: first, there need due reservations with respect to the analyses that use the data measured in the PPP against the headline growth rates such as ones in the tests of economic "conversion"; second, it is a faulted exercise if one estimates the future economy size by extrapolating at a headline growth rate the benchmark GDP that is adjusted by the PPP.

Suggested Citation

  • HIROSE Noriki, 2005. "A PPP Measured Large Economy is Compatible with High Headline Growth Rates? (A High Growth Rate and a Large Discrepancy between the PPP and the Market Exchange Rate)(in Japanese)," ESRI Discussion paper series 153, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esj:esridp:153
    as

    Download full text from publisher

    File URL: http://www.esri.go.jp/jp/archive/e_dis/e_dis153/e_dis153a.pdf
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esj:esridp:153. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (KAWAMOTO Takuma). General contact details of provider: http://edirc.repec.org/data/esrgvjp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.