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On Measuring Regional or Global Growth and Inflation

D.S. Prasada Rao, Alicia Rambaldi () and Bert Balk

No 552, Discussion Papers Series from University of Queensland, School of Economics

Abstract: In a paper contributed to the Ottawa Group, Rao and Balk (2013) presented an overview of concepts used in the field of international comparison, such as Nominal GDP, Real GDP, and Price Level Index. The present paper continues by providing a simple, symmetric formula for the calculation of regional or global growth and inflation. What distinguishes our proposal from currently used methods (at international organisations such as Eurostat, OECD, and The World Bank) is its top-down approach ensuring consistency between value, quantity, and price developments. The role played by exchange rates and purchasing power parities also becomes clear. We consider the aggregation properties of the method with respect to two dimensions, namely the grouping of countries, and the components of GDP (private household consumption, investment, government consumption, exports, and imports). An example, based on data recently released by the International Comparison Program, illustrates our proposal.

Keywords: International comparison; world growth; world inflation; exchange rate; purchasing power parity; index number theory (search for similar items in EconPapers)
JEL-codes: C43 O47 (search for similar items in EconPapers)
Date: 2015-12-11
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