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What Is Purchasing Power Parity (PPP), and How Is It Calculated?
What Is Purchasing Power Parity (PPP), and How Is It Calculated?
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ABC of PPP 😌 The Purchasing Power Parity indicator can be used to compare economies regarding their GDP, labour productivity and actual individual consumption, and in some cases to analyse price convergence and to compare the cost of living between places. It is based on the law of one price, which means if there are no transaction costs or trade barriers for a particular good, then the price for that good should be the same at every location on earth. The calculation of the PPP, according to t
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