A note on estimating income inequality across countries using PPP exchange rates. (March 2018)

• Record Type: Journal Article
• Authors: Ghosh, Jayati
• Other Names: Harcourt GC guest-editor.; Junankar PN (Raja) guest-editor.
• Is Part Of: Economic and labour relations review. Volume 29:Number 1(2018)
• Page Start: 24
• Page End: 37
• Publication Date: 2018-03
• Subjects: Economic development -- exchange rates -- global poverty -- inequality -- measurement -- purchasing power parities -- sustainable development goals -- trade arbitrage; Australia -- Economic conditions -- Periodicals; Industrial relations -- Australia -- Periodicals; Economics -- Periodicals; Industrial relations -- Periodicals; 331
• DOI: 10.1177/1035304618756263
• Languages: English
• ISSNs: 1035-3046

Abstract

The use of exchange rates based on Purchasing Power Parities to compare incomes across countries and over time has now become standard practice. But there are reasons to believe that this could lead to excessively inflated incomes for poorer countries and in some cases also inflate the extent of real changes over time. Estimates of gross domestic product growth in the Chinese and Indian economies in recent years provide examples of this. JEL Codes: I32, N35, P52