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A note on estimating income inequality across countries using PPP exchange rates

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  • Jayati Ghosh

Abstract

The use of exchange rates based on Purchasing Power Parities to compare incomes across countries and over time has now become standard practice. But there are reasons to believe that this could lead to excessively inflated incomes for poorer countries and in some cases also inflate the extent of real changes over time. Estimates of gross domestic product growth in the Chinese and Indian economies in recent years provide examples of this. JEL Codes: I32, N35, P52

Suggested Citation

  • Jayati Ghosh, 2018. "A note on estimating income inequality across countries using PPP exchange rates," The Economic and Labour Relations Review, , vol. 29(1), pages 24-37, March.
    • Handle: RePEc:sae:ecolab:v:29:y:2018:i:1:p:24-37
    DOI: 10.1177/1035304618756263
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    References listed on IDEAS

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    Cited by:

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    3. Semieniuk, Gregor, 2024. "Inconsistent definitions of GDP: Implications for estimates of decoupling," Ecological Economics, Elsevier, vol. 215(C).

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    More about this item

    Keywords

    Economic development; exchange rates; global poverty; inequality; measurement; purchasing power parities; sustainable development goals; trade arbitrage;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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