Re:Treemap of World GDP by Purchasing Power Parity (PPP) 2020
by bryanlarsen on Thursday March 28, 2024 @07:00AM
(#39849653)
"Heft" is how much weight a country can throw around to affect other countries. Stuff like fighter jets & aircraft carriers, aid deals, trade deals, purchasing assets in other countries, et cetera. Most of that is in trade currency, so no PPP adjustment. Building fighter jets is cheaper in low-PPP countries, but only partially. So, no I don't think you should PPP adjust if you want to measure heft.
Re:Treemap of World GDP by Purchasing Power Parity (PPP) 2020
by The_Colonel on Thursday March 28, 2024 @08:30AM
(#39850411)
> Building fighter jets is cheaper in low-PPP countries, but only partially.
Even that holds only true if all other things are equal. But low PPP countries are strongly correlated with less industrialization, less educated workforce etc. That's why most (low-PPP) countries, even large ones, don't produce their own jets - it's cheaper to buy them.
> Most of that is in trade currency, so no PPP adjustment.
It's non-trivial to make that cut. I'd say things PPP for stuff like food doesn't count, but PPP for even rather basic industrial products already does.
Re:Treemap of World GDP by Purchasing Power Parity (PPP) 2020
by hasty_pudding on Thursday March 28, 2024 @07:57AM
(#39850112)
Wait but the dollar has a higher exchange rate than Chinese currency as well.
Depends on what you want to compare.
If you want to understand the "heft" of the country in terms of the sheer size of the economy (adjusted for exchange rates) then you do country GDP on PPP basis.
If you want to understand the size taking into account currency rates then you do plain GDP.
If you want to understand how well off a citizen is THEN you do per-capita GDP.
When countries play on the world stage for influence, their overall heft i.e. total GDP (whether on a PPP basis or not) is essentially the main determinant.