GDP figures: How the Financial Times gets it wrong


David Henderson

Published:


Dollar market exchange rates are erroneously used by many publications to make cross-country comparisons of GDP. Exchange rates underestimate the relative size of developing economies and provide misleading estimates of important economic ratios such as energy intensity figures. The United Nations System of National Accounts recommend the use of Purchasing Power Parity converters which account for cross-country differences in price levels.



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