The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

International Income Comparisons

  • Irving B. Kravis
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_708

Abstract

Despite the accumulating evidence of systematic error, the most common means of making international comparisons still remains the conversion of incomes expressed in own-currencies to a numeraire currency, most often the US dollar, via the exchange rate. The procedure has long been held suspect by travellers who could observe that some countries were dear and others inexpensive – i.e. that exchange rates did not reflect the purchasing power of currencies. As will be shown, the purchasing power of the currencies of poor countries tends to be understated by exchange rates. Exchange-rate conversions thus tend to exaggerate the dispersion of the real per capita incomes of the different nations.

This is a preview of subscription content, log in to check access.

Bibliography

  1. Beckerman, W. 1966. International comparisons of real income. Paris: OECD Development Centre.Google Scholar
  2. Gilbert, M., and I.B. Kravis. 1954. An international comparison of national products and the purchasing power of currencies: A study of the United States, the United Kingdom, France, Germany, and Italy. Paris: OEEC.Google Scholar
  3. Kravis, I.B. 1984. Comparative studies of national incomes and prices. Journal of Economic Literature 22(March): 1–39.Google Scholar
  4. Kravis, I.B. 1986. The three faces of the international comparison project. World Bank Research Observer 1(January): 3–26.CrossRefGoogle Scholar
  5. Kravis, I.B., A.W. Heston, and R. Summers. 1978a. International comparisons of real product and purchasing power. Baltimore: Johns Hopkins University Press.Google Scholar
  6. Kravis, I.B., A.W. Heston, and R. Summers. 1978b. Real per capita for more than one hundred countries. Economic Journal 88(June): 215–242.CrossRefGoogle Scholar
  7. Kravis, I.B., A.W. Heston, and R. Summers. 1982. World product and income: International comparisons of real gross product. Baltimore: Johns Hopkins University Press.Google Scholar
  8. Maddison, A. 1970. Economic progress and policy in developing countries. New York: Norton.Google Scholar
  9. Maddison, A. 1983. A comparison of the levels of GDP per capita in developed and developing countries, 1790–1980. Journal of Economic History 43(March): 27–41.CrossRefGoogle Scholar
  10. SOEC (Statistical Office of the European Community). 1977. Comparisons in real values of the aggregates of ESA, 1975. Luxembourg: EEC.Google Scholar
  11. SOEC (Statistical Office of the European Community). 1983. Comparison in real values of the aggregates of ESA, 1980. Luxembourg: EEC.Google Scholar
  12. SOEC (Statistical Office of the European Community). 1985. Comparison of price levels and economic aggregates: The results for African countries. Luxembourg: EEC.Google Scholar
  13. Summers, R., and A.W. Heston. 1984. Improved international comparisons of real product and its composition: 1950–80. Review of Income and Wealth 30(2): 207–262.CrossRefGoogle Scholar
  14. United Nations. 1985. National accounts statistics, main aggregates and detailed tables, 1982. New York: United Nations.Google Scholar
  15. United Nations and Commission of the European Communities. 1986. World comparisons of purchasing powers and real product for 1980: Phase IV of the international comparison project: Part I: Summary results for 60 countries. New York: United Nations.Google Scholar
  16. Ward, M. 1985. Purchasing power parities and real expenditures in the OECD. Paris: OECD.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Irving B. Kravis
    • 1
  1. 1.