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That's exactly what the PPP adjustment is supposed to capture. If a dollar buys half as much energy in the U.S. as the USD/EUR conversion does in Europe, that
by nostrademons 3y ago
That's exactly what the PPP adjustment is supposed to capture. If a dollar buys half as much energy in the U.S. as the USD/EUR conversion does in Europe, that adjusts the EU PPP for the energy sector up by 2x. (Not exactly a great example, Europe has its own energy crisis.)
I'm surprised at the number of people who are confidently arguing against mrb - they're exactly correct here. The point of PPP adjustments is to factor out the effect of having a strong currency, and the USD's status as reserve currency is exactly why the US GDP has been overtaking the EU. Adjust for what a dollar actually buys you domestically and the picture is far more muddled.
- ffhhttt 3y ago> status as reserve currency is exactly why the US GDP has been overtaking the EU USD was the reserve currency in the 90s and mid 2000s. Back then the Euro was very strong and some large European countries were close to overtaking US in GDP per capita. The last 10 years have more or less been a lost decade in most of Western Europe because (amongst other things) it almost entirely missed out on the tech boom.
- Cymrukicks 3y ago[flagged]
- ffhhttt 3y ago> boom certainly not economically. I’m not that certain about this.