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PURCHASING POWER PARITIES IN INTERNATIONAL COMPARISONS: QUANTITY vs. PRICE COMPARISONS

Author

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  • Laszlo Drechsler
  • Eugenia Krzeczkowska

Abstract

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.

Suggested Citation

  • Laszlo Drechsler & Eugenia Krzeczkowska, 1982. "PURCHASING POWER PARITIES IN INTERNATIONAL COMPARISONS: QUANTITY vs. PRICE COMPARISONS," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(3), pages 253-259, September.
  • Handle: RePEc:bla:revinw:v:28:y:1982:i:3:p:253-259
    DOI: 10.1111/j.1475-4991.1982.tb00616.x
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