Purchasing power parity measures: advantages and limitations

Working and discussion papers
June 2010
Samuel Moon, Sheila Page, Barry Rodin, Donald Roy

Discussion and analysis on international comparison using Purchasing Power Parity (PPP) have been somewhat neglected in recent years. With recent shifts in economic growth and constantly changing poverty dynamics, as well as forthcoming major evaluations of progress on the Millennium Development Goals (MDGs), it is an opportune time to revive the debate. This paper examines what PPP tries to do, some of the problems of measuring it and using different measures, and why it matters.

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