Gdp vs ppp?
Answer:
From http://ucatlas.ucsc.edu/glossary.html...
Gross Domestic Product - The total monetary value of all goods and services produced domestically by a country. It includes income earned domestically by foreigners, but does not include income earned by domestic residents on foreign ground.
Purchasing Power Parity - To compare economic statistics across countries, the data must first be converted into a common currency. Unlike conventional exchange rates, PPP rates of exchange allow this conversion to take account of price differences between countries. Recently purchasing power parity exchange rates have been calculated comparing the cost of a common basket of commodities in every country. By eliminating differences in national price levels, the method facilitates comparisons of real values for income, poverty, inequality and expenditure patterns.
Based on these definitions, I would say that PPP is a better indicator. We live in a very 'global' time, and tend to be less concerned with our country alone, but rather our country's status in comparison to others. The PPP allows for this comparative element so it is more useful for gauging economic performance as it compares to the world economy.
Apples and oranges. GDP is an indicator of economic output; PPP is a price index adjustment.
What you mean is: GDP in nominal $US vs. PPP-adjusted GDP? The latter is preferred for cross-country comparisons, as it is not subject to the vagaries or even fundamental imbalances in the exchange rate.
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