Click to open interactive version What are the main limitations of PPP adjustments? Also, luxury goods that are valued for their exclusivity as well as their quality complicate the story further because the widespread availability of the product may actually degrade its value even if the object is nominally the same.
Comparing Economies Economic Growth as a Measuring Stick Economic growth is measured as the increase in real gross domestic product GDP in the long-run, through higher resources or productivity. Price level differences imply that with the same income in US dollars, you could be on the verge of poverty in the US, or fairly well-off in rural India.
Provided by: Wikipedia. As you can imagine, it is difficult to compare countries across large time horizons, but, after controlling for as many of these effects as you can, comparisons are possible.
Nye, John V. This can be seen in the visualization below, which plots GDP per capita in international dollars against price levels relative to the US. This improvement is due to product availability and better knowledge. We need a conversion factor that achieves purchasing power parity.
On a more mundane level, can any medicine have done as much good for as little cost as aspirin?