IMF Working Papers

Aggregation of Economic Indicators Across Countries: Exchange Rate versus PPP Based GDP Weights

By Marianne Schulze-Gattas, Anne Marie Gulde

May 1, 1992

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Format: Chicago

Marianne Schulze-Gattas, and Anne Marie Gulde. Aggregation of Economic Indicators Across Countries: Exchange Rate versus PPP Based GDP Weights, (USA: International Monetary Fund, 1992) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Relative GDP shares are frequently used as weights in aggregations. In order to ensure that these weights reflect countries’ shares in real output, GDP data in national currencies should be converted into a common numeraire currency at purchasing power parity (PPP) rates. A review of the empirical evidence on the relationship between exchange rates and prices suggests that market (or official) exchange rates are generally poor proxies for PPP rates. The paper examines the PPP-based GDP data generated by the International Comparison Program and compares aggregations with PPP- and exchange rate-based GDP weights.

Subject: Currencies, Exchange rates, Expenditure, Foreign exchange, Market exchange rates, Money, Public investment and public-private partnerships (PPP), Purchasing power parity

Keywords: Asia and Pacific, Currencies, Eastern Europe, Exchange rates, GDP data, GDP weight, Global, Market exchange rates, Middle East, PPP, Price level, Public investment and public-private partnerships (PPP), Purchasing power parity, Weighting system, Western Hemisphere, World GDP growth, WP

Publication Details

  • Pages:

    44

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1992/036

  • Stock No:

    WPIEA0361992

  • ISBN:

    9781451845396

  • ISSN:

    1018-5941

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