Purchasing power parities (PPPs) are the rates of currency conversion that equalize the purchasing power of different currencies by eliminating the differences in price levels between countries. In their simplest form, PPPs are simply price relatives that show the ratio of the prices in national currencies of the same good or service in different countries. They make it possible to compare the gross domestic product (GDP) and component expenditures of economies in real terms by eliminating the price level differences between them. The price and national accounts expenditure data required to estimate PPPs are collected through the International Comparison Program (ICP). A global statistical initiative, the ICP estimates and publishes the PPPs of the world’s economies. Since the demand for comparable GDP and component expenditures is high, PPPs play a key role in the analyses carried out by policymakers, multilateral institutions, academia, and the private sector. Upon completing the course, the participants will be able to comprehend the key PPP concepts and data requirements; understand the ICP program; connect PPPs with their uses and applications; and grasp basics of PPP calculation methods and processes.
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