Output Growth and Inflation across Space and Time

Abstract

It is common for comparisons to be made of output growth and inflation across groups of countries, yet such comparisons can result in inconsistencies. We address two problems: (i) how to measure aggregate real output and inflation for groups of countries and (ii) how to construct measures of real GDP for a group of countries where the country measures of real GDP are consistent across time and space. A method is proposed for harmonizing conflicting estimates of OECD member-country real GDP, ensuring consistency over space and overall group consistency over time. A new measure of OECD inflation is also proposed.

Keywords: Purchasing Power Parities, PPPs, ICP, OECD country statistics, inflation, price and volume indexes, Fisher indexes, country competitiveness

JEL Classification: C43, C82, E01