THE ICP, PPP AND HOUSEHOLD EXPENDITURE PATTERNS

Kenneth Clements, Yihui Lan, Haiyan Liu and Long Vo
Additional contact information
Yihui Lan: Business School, The University of Western Australia, http://www.web.uwa.edu.au/person/yihui.lan
Haiyan Liu: Business School, The University of Western Australia, http://www.web.uwa.edu.au/person/haiyan.liu

No 22-18, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: This paper reviews and synthetises three areas: The International Comparison Program (ICP), purchasing power parity (PPP) and patterns of household expenditure across countries. To compare countries consistently, the ICP uses relative price levels as PPPs. This approach is seemingly different to that of international finance, whereby PPP is now widely taken to mean that market exchange rates reflect national price levels over the longer term. A unification of the two approaches is suggested with a dependent-economy model. Detailed information on household expenditure patterns is another prominent component of the ICP. The prospectivity of these data is illustrated with several “laws” of consumption, a survey of research on cross-country consumption, and estimates of a global system of demand equations.

Keywords: International Comparison Program; purchasing power parity; currency valuation; household expenditure patterns across countries (search for similar items in EconPapers)
JEL-codes: D12 E01 F31 (search for similar items in EconPapers)
Pages: 60
Date: 2022
New Economics Papers: this item is included in nep-opm
Note: MD5 = ef3aa527e161105f1cda918d5af273cc
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