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PPPs: Purchasing Power or Producing Power Parities?

Author

Listed:
  • Baldwin, John R.
  • Macdonald, Ryan

Abstract

This 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.

Suggested Citation

  • Baldwin, John R. & Macdonald, Ryan, 2009. "PPPs: Purchasing Power or Producing Power Parities?," Economic Analysis (EA) Research Paper Series 2009058e, Statistics Canada, Analytical Studies Branch.
  • Handle: RePEc:stc:stcp5e:2009058e
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    Citations

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    Cited by:

    1. 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.
    2. Andrew Sharpe, 2014. "What Explains the Canada-U.S. Software Investment Intensity Gap?," CSLS Research Reports 2014-04, Centre for the Study of Living Standards.

    More about this item

    Keywords

    Economic accounts; Gross domestic product; Income and expenditure accounts; International trade; Trade patterns;

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