A Review of PPP-Adjusted GDP Estimation and its Potential Use for the Fund's Operational Purposes

Nancy Wagner

No 1995/018, IMF Working Papers from International Monetary Fund

Abstract: International comparison of economic aggregates, expressed in domestic currencies, requires their conversion into a common numeraire currency such as the U.S. dollar or the SDR. Since market (or official) exchange rates are subject to fluctuations which may result in comparisons that do not reflect cross-country differences in real economic activity, it is often recommended that purchasing power parity (PPP) rates be used for conversion instead of exchange rates. It is generally agreed that PPP rates are conceptually appropriate conversion factors. However, their practical implementation raises questions regarding the quality of the PPP indices which are currently available. This paper reviews the data and methodology underlying the construction of PPP indices, with particular emphasis on the PPP-based estimates of GDP used in the Fund’s World Economic Outlook and the World Bank’s World Development Report, and examines some of the issues associated with the use of such PPP-based estimates of GDP for the Fund’s operational purposes (such as quota calculations or determination of SAF or ESAF eligibility).

Keywords: WP; PPP conversion factors; price level; U.S. dollar; real GDP; ICP estimate; GDP share; ICP-style price survey data; ICP survey; GDP estimate; ICP price survey; PPP-adjusted GDP; PPP index; countries' PPP; Purchasing power parity; Public investment and public-private partnerships (PPP); Market exchange rates; Exchange rates; Purchasing power; Global (search for similar items in EconPapers)
Pages: 34
Date: 1995-02-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=1885 (application/pdf)

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: https://EconPapers.repec.org/RePEc:imf:imfwpa:1995/018

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().