Estimating Real Production and Expenditures across Nations : A Proposal for Improving the Penn World Tables
From its inception, the Penn World
Tables (PWT), building on the International Comparisons
Program (ICP) of the United Nations, has sought to compare
the standard of living of individuals in different
countries. That is, the term "real GDP per capita"
as reported in the PWT is intended to represent the ability
to purchase goods and services by a representative agent in
the economy. The same is true of benchmark comparisons as
published by the United Nations, Eurostat, or OECD. But this
expenditure-side interpretation of real GDP is quite
different from the uses to which benchmark ICP and PWT data
are frequently applied, such as in growth regressions, where
"real GDP" is intended to reflect the production
side of the economy. In this paper the authors propose a new
approach to international comparisons of real GDP measured
from the output side. They modify the traditional
Gary-Khamis system, which measures real GDP from the
expenditure side using real domestic expenditure, to include
differences in the terms of trade between countries. The
analysis shows that this system has a strictly positive
solution under mild assumptions. On the basis of a set of
domestic final output, import, and export prices and values
for 151 countries in 1996, differences between real GDP
measured from the expenditure and output side can be
substantial, especially for small open economies.
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Bibliographic Details
| Main Authors: |
Feenstra, Robert C.,
Heston, Alan,
Timmer, Marcel P.,
Deng, Haiyan |
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| Language: | English |
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| Published: |
World Bank, Washington, DC
2007-03
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| Subjects: | BENCHMARK,
BENCHMARK DATA,
CONSUMER PRICE,
CONSUMER PRICE INDEX,
CONSUMER PRICES,
CURRENCY,
DEFLATION,
DEFLATORS,
DOMESTIC DEMAND,
ECONOMIC THEORY,
EXCHANGE RATES,
EXPENDITURE,
EXPENDITURES,
EXPORT BASKETS,
EXPORT PRICE,
EXPORT PRICES,
EXPORT PRODUCTS,
EXPORT SHARES,
EXPORT SUBSIDIES,
EXPORTS,
FINAL GOODS,
GDP PER CAPITA,
GROSS OUTPUT,
IMPERFECT COMPETITION,
IMPORT DATA,
IMPORT PRICE,
IMPORT PRICES,
IMPORT TARIFFS,
IMPORTS,
INDEX NUMBERS,
INTERMEDIATE INPUTS,
INTERNATIONAL ECONOMICS,
INTERNATIONAL PRICES,
INTERNATIONAL TRADE,
MARKET SEGMENTATION,
MARKET SHARES,
NATIONAL INCOME,
OIL EXPORTERS,
OPEN ECONOMIES,
OPENNESS,
PRICE LEVEL,
PRICE LEVELS,
PRODUCT QUALITY,
PURCHASING,
PURCHASING POWER,
REAL GDP,
RETAIL,
SPECIALIZATION,
STANDARD OF LIVING,
SUBSTITUTE,
TARIFF RATES,
TERMS OF TRADE,
TERMS OF TRADE IMPROVEMENT,
TRADE BALANCE,
TRADE DATA,
TRADE EFFECT,
TRADE FLOWS,
TRADE POLICIES,
TRADE PRICES,
TRANSPORT COSTS,
VALUE OF EXPORTS,
WAGES,
WEALTH,
WORLD TRADE, |
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| Online Access: | http://documents.worldbank.org/curated/en/2007/03/7451133/estimating-real-production-expenditures-across-nations-proposal-improving-penn-world-tables-estimating-real-production-expenditures-across-nations-proposal-improving-penn-world-tables
https://hdl.handle.net/10986/7243
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