Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

Foreign entry into British retailing, 1850‐1994

Abstract: A newly compiled dataset allows us to trace the history of foreign direct investment in UK retailing since 1850. Our results suggest that the upsurge of cross‐border activity in the 1980s and early 1990s was exceptional in absolute terms. However, when compared to the most likely determinant of entry rates, consumer purchasing power, the recent upturn is best seen as a return, after several decades of relatively low entry rates, to the high level of FDI prevailing in the early twentieth century. Moreover, we conclude that cross‐border retailing will continue to increase, and to do so at a rate close to twice that of the growth in consumer purchasing power.

The three faces of the international comparison project

Abstract: Purchasing power parities (PPPs) are the correct converters for translating gross domestic product (GDP) and its components from own-currencies to dollars; the alternative measure, exchange rates, obscures the relationship between the quantity aggregates of different countries. Drawing on the reports of the United Nationals International Comparison Project (ICP), the article contends that exchange rates systematically understate the purchasing power of the currencies of low-income countries and thus exaggerate the dispersion of national per capita incomes. Where full-scale PPP estimates are not available, estimates based on shortcut methods better approximate what the benchmark estimates would be than do the exchange rate conversions. The ICP results also illuminate price and exchange rate relationships among countries by providing a measure of the difference in the levels of prices in different countries. ICP price comparisons for components GDP make possible the analysis of comparative price and quantity structures of different countries and provide the raw materials for many types of analytical studies.

The Sources and Sustainability of China's Economic Growth

Abstract: IN 1978, AT THE outset of its economic reform, China was the world’s tenthlargest economy, with a GDP of about $150 billion, or less than 6 percent of U.S. GDP at the time. By 2005, however, China’s economy, at $2.2 trillion, had grown to become the fourth largest in the world, behind only the United States at $12.5 trillion, Japan at $4.5 trillion, and Germany at $2.8 trillion. The above figures, which come from the World Bank, evaluate GDP at current exchange rates and do not take account of differences in the purchasing power of currencies. When measured instead at purchasing power parity (PPP), China is already the world’s second-largest economy, with almost $9 trillion in output, nearly three quarters that of the United States. It has been suggested that, at current growth rates, China’s GDP stated in PPP terms could exceed that of the United States as early as 2010. 1 When China’s GDP converted at current exchange rates does match that of the United States, assuming that China’s population remains four times the U.S. population, Chinese income per capita will then be but one quarter that of the United States. By comparison, the purchasing power of the average Chinese resident will substantially exceed one quarter that of the average U.S. resident, perhaps rising to the vicinity of one half.

New Private Monies: A Bit-Part Player?

Abstract: New forms of private monies regularly hit the newspaper headlines. However, there is relatively little discussion of whether such innovations will last the pace and perform effectively the functions that we expect of money. This monograph, by one of the leading scholars in the field of private money and free banking, examines new innovations such as Bitcoin, the Liberty Dollar and e-gold. Kevin Dowd concludes that competition in this field is welcome given the lamentable history of state money which has seen its purchasing power shrink greatly over the years. However, the author also concludes that, whilst recent developments in private monetary systems are welcome and may herald a forthcoming revolution, new monies face many challenges. Some of those challenges relate to the nature of the private monies themselves. Other challenges come from law enforcement agencies that are determined to prevent competition with state money. Kevin Dowd outlines the regulatory and legal changes that will be necessary if beneficial innovation is to thrive and discusses how developments in private money are part of a more general movement amongst people who wish to reduce the role of the state in their lives. This monograph is essential reading for anybody interested in new developments in money, finance and banking.