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Macro-economic Measures for a Globalised World: Global Growth and Inflation

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  • Rao, D.S. Prasada

Abstract

In this paper we offer a framework for measuring global growth and inflation built on an index number theory and practice; standard national accounts principles; and the concepts and methods for international macroeconomic comparisons. Our approach provides a sound basis for the estimates of purchasing power parity and exchange-rate based global growth regularly published by IMF, the World Bank and the United Nations. It also rectifies deficiencies in the current procedures used in measuring global inflation. For illustrative purposes, we present our estimates of global growth and inflation using data for 141 countries for the years 2005 and 2011. Contribution of movements in exchange rates and purchasing power parities to global inflation are presented.

Suggested Citation

  • Rao, D.S. Prasada, 2018. "Macro-economic Measures for a Globalised World: Global Growth and Inflation," CEI Working Paper Series 2018-11, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2018-11
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    References listed on IDEAS

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    1. World Bank, 2008. "Global Purchasing Power Parities and Real Expenditures : 2005 International Comparison Program," World Bank Publications - Books, The World Bank Group, number 21558, December.
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    6. Zhang, Qi, 2017. "The Balassa–Samuelson relationship: services, manufacturing and product quality," LSE Research Online Documents on Economics 68705, London School of Economics and Political Science, LSE Library.
    7. Tommaso Monacelli & Luca Sala, 2009. "The International Dimension of Inflation: Evidence from Disaggregated Consumer Price Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(s1), pages 101-120, February.
    8. Robert C. Feenstra & Hong Ma & J. Peter Neary & D.S. Prasada Rao, 2013. "Who Shrunk China? Puzzles in the Measurement of Real GDP," Economic Journal, Royal Economic Society, vol. 123(12), pages 1100-1129, December.
    9. Robert Inklaar & D. S. Prasada Rao, 2017. "Cross-Country Income Levels over Time: Did the Developing World Suddenly Become Much Richer?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(1), pages 265-290, January.
    10. World Bank, 2011. "World Bank for Results 2011," World Bank Publications - Books, The World Bank Group, number 15792, December.
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    More about this item

    Keywords

    International comparisons; world growth; world inflation; exchange rate; purchasing power parity; index number theory;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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