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There is literarily a table in the FAQ flr what PPP can be used for and what it cannot be. PPP cannot be used to measure growth, period. Nominal GDP increase
by dogma1138 3y ago
There is literarily a table in the FAQ flr what PPP can be used for and what it cannot be.
PPP cannot be used to measure growth, period.
Nominal GDP increase indicates an increased production, PPP increase indicate absolutely nothing. In fact PPP often increase or maintains its level in times of crisis when income level drops and unemployment rises.
The US is far bigger than NY and SF and even then many EU cities can more than compare… The housing stock is far cheaper in the US and you get far far more for your money.
- LudwigNagasena 3y ago> There is literarily a table in the FAQ flr what PPP can be used for and what it cannot be. Yeah, and it says "Uses with limitations: To analyse changes over time in relative GDP per capita and relative prices". > PPP cannot be used to measure growth, period. > PPP increase indicate absolutely nothing. No, refer to paragraphs 32-34 of the overview from the PPP Manual: https://www.oecd.org/sdd/prices-ppp/PPP%20manual%20revised%202012.pdf https://www.oecd.org/sdd/prices-ppp/PPP%20manual%20revised%2... > Nominal GDP increase indicates an increased production No, it doesn't. Value = price x volume. If value has gone up, it means either price or volume had gone up, but you cannot say more than that; for that you need real GDP. > In fact PPP often increase or maintains its level in times of crisis when income level drops and unemployment rises. Yeah, GDP and GDP PPP are both imperfect metrics. They are just proxies and should be treated as such. > The US is far bigger than NY and SF and even then many EU cities can more than compare… The housing stock is far cheaper in the US and you get far far more for your money. So what? It doesn't change the fact that nominal GDP fails horribly as a metric for such cases.