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PURCHASING POWER PARITIES IN INTERNATIONAL COMPARISONS: QUANTITY vs. PRICE COMPARISONS
Author(s) -
Drechsler Laszlo,
Krzeczkowska Eugenia
Publication year - 1982
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1982.tb00616.x
Subject(s) - economics , purchasing power , price index , purchasing , price level , econometrics , microeconomics , monetary economics , macroeconomics , operations management
Just as intertemporal price indices have two functions, to measure price changes and to deflate current values to constant values, this is true also for interspatial price indices, purchasing power parities (PPPs). In practice these two functions of PPPs, for conversion and for comparing price levels, are not always distinguished, and this may have some disadvantages since in a number of cases the differences between the two PPPs might be considerable. The authors review the differences in content of the two types of PPPs, and make some suggestions for making the distinction more explicitly.