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A note on how to normalise the Geary-Khamis index of purchasing power parity

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  • Utz-Peter Reich

Abstract

The World Bank regularly publishes GDP-figures of its member countries, compiled at purchasing power parities. It employs the Geary-Khamis index for transforming the aggregates. That index consists of a system of homogeneous equations, which requires an additional non-homogeneous equation, to determine an appropriate unit of value measurement. This is the US-$, at present. The paper discusses that convention, points out its shortcomings, suggests an alternative existing, and adds an interpretation in terms of international economics.

Suggested Citation

  • Utz-Peter Reich, 2018. "A note on how to normalise the Geary-Khamis index of purchasing power parity," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 12(3), pages 235-244, December.
    • Handle: RePEc:spr:astaws:v:12:y:2018:i:3:d:10.1007_s11943-018-0233-0
    DOI: 10.1007/s11943-018-0233-0
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    References listed on IDEAS

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    1. Balk,Bert M., 2012. "Price and Quantity Index Numbers," Cambridge Books, Cambridge University Press, number 9781107404960.
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    Cited by:

    1. Timo Schmid & Markus Zwick, 2018. "Vorwort der Herausgeber," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 12(3), pages 189-193, December.

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    More about this item

    Keywords

    Index numbers; Geary-Khamis index; Purchasing power parity; International comparison;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • F19 - International Economics - - Trade - - - Other

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