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

Published online by Cambridge University Press:  01 January 2023

Jayati Ghosh
Jayati Ghosh*
Affiliation:
Jawaharlal Nehru University, India
*
Jayati Ghosh, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Mehrauli Road, New Delhi, 110067, India. Email: jayatijnu@gmail.com
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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.

Keywords

I32N35P52Economic developmentexchange ratesglobal povertyinequalitymeasurementpurchasing power paritiessustainable development goalstrade arbitrage
Type
Articles
Information
The Economic and Labour Relations Review , Volume 29 , Issue 1: Symposium on inequality in honour of AB Atkinson , March 2018 , pp. 24 - 37
Copyright
Copyright © The Author(s) 2018

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