Does PPP-Adjusted Data Exaggerate the Relative Size of Poor Economies?
Trinity College Dublin - Department of Economics; Peter G. Peterson Institute for International Economics; Centre for Economic Policy Research (CEPR)
CEPR Discussion Paper Series No. 1865
Conventional PPP-adjusted real output measures, invaluable for making international comparisons of living standards, may greatly exaggerate the productive capacity of poor countries. The equilibrium prices of an hypothetical world of full economic integration provide an instructive basis for evaluating the potential share of different countries in world output.
JEL Classification: F43, O47
Date posted: September 16, 1998