Edward Elgar Publishing Purchasing Power Parities of Currencies: Recent Advances in Methods and Applications

This up-to-date book demonstrates how the purchasing power parities (PPPs) of currencies are being increasingly used in place of exchange rates for a variety of purposes. These include: comparisons of real income, measurements of global inequality and poverty, calculation of the human development index and assessment of nations economic performance. Despite the increasing popularity of PPPs, many users have very little appreciation of the data and methods used in their derivation. This timely monograph brings together a number of significant contributions from leading researchers in the field, offering a comprehensive review of the latest methods used in the construction and application of PPPs. The authors provide a broad overview of the current state-of-the-art both in terms of techniques as well as current practice with various international organisations. Given the increasing application of PPPs in this truly globalised world, this book will be a stimulating read for researchers and academics involved in international comparisons and development economics, general economists and economist statisticians. Review 'Perhaps the most significant challenge economists face when comparing economic aggregates across countries is that the data needs to be expressed in a common currency. The use of Purchasing Power Parities (PPPs) to convert national GDP's into a common currency, for example, is the recognized method to avoid the deficiencies in exchange rates. However, the methodology to produce PPPs is probably the most complex and difficult statistical activity in the world. The recently completed 2005 International Comparison Program (ICP) included 146 countries with huge variations in the size and structure of their economies and covered all components of the GDP. Because of the huge differences in the scope and scale of national economies, the ICP was organized to first produce regional PPPs followed by their linkage to produce global PPP's. Many of the problems encountered are considered in this book. The list of authors reads like a who's who in the field of international economic statistics who provide a valuable addition to the knowledge about PPPs. Purchasing Power Parities fits a critical need as it brings together the most recent significant developments to improve the estimation of internationally comparable economic indicators.' About the Author Edited by D.S. Prasada Rao, Professor and Australian Research Council Professorial Fellow, School of Economics, The University of Queensland, Brisbane, Australia