Economics at your fingertips  

Facets of Balassa-Samuelson Thirty Years Later

Paul Samuelson

Review of International Economics, 1994, vol. 2, issue 3, 201-26

Abstract: Prior to the important Penn studies of Kravis-Heston-Summers, statisticians relied on exchange-rate conversion estimates that would be correct only if naive Gustav Cassel versions of purchasing-power parity were true. By contrast, correct real-income estimates, using actual local prices and incomes, exhibit the systematic Penn effect: real per capita income ratios between poor and rich are systematically exaggerated by conventional exchange-rate conversions. Bela Balassa and Paul Samuelson, independently in 1964, explained why. And, as the Penn authors cited, David Ricardo and Roy Harrod had already similarly argued. It is shown here how subtle must be the theoretical analysis addressed by Jagdish Bhagwati and mainstream economists in tackling this problem. Copyright 1994 by Blackwell Publishing Ltd.

Date: 1994
References: Add references at CitEc
Citations View citations in EconPapers (64) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Series data maintained by Wiley-Blackwell Digital Licensing ().

Page updated 2017-11-18
Handle: RePEc:bla:reviec:v:2:y:1994:i:3:p:201-26