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More like $30-$40 billion not $200 billion. The current PPP multiplier is somewhere between 3 and 4. PPP is most useful when looking at domestically manufactur
by aatharuv 7y ago
More like $30-$40 billion not $200 billion. The current PPP multiplier is somewhere between 3 and 4.
PPP is most useful when looking at domestically manufactured items and services. When looking at anything that needs to be imported, normal exchange rates are a much better tool. In fact due to import duties in India, many international goods are more expensive in India that in most of the west.
- NTDF9 7y agoI literally used the multiplier here: https://data.oecd.org/conversion/purchasing-power-parities-ppp.htm https://data.oecd.org/conversion/purchasing-power-parities-p... As shocking as it sounds, PPP multiple is really 18x
- h43k3r 7y agoIf you compare just the house rents in all the major Indian metros then PPP is around 4 5.
- NTDF9 7y agoThen compare it with major US metros only and not entire US. The multiplier again becomes 18x
- aatharuv 7y agoThat's not the PPP multiple -- that's the PPP exchange rate. From the chart you stated. Total, National currency units/US dollar, 2000 – 2018 I.e, in PPP terms 18 Rupees is one US Dollar. In real terms, about 70 Rupees is one US dollar, given a PPP multiplier of slightly under 4 at current nominal exchange rates.
- triceratops 7y agoOK but labor is a dominant cost in most of these startups. The labor is all local, being paid local wages. PPP is absolutely relevant.