ASi" kUCTURE FlOR DEVELOPMENT

is expected to cover more than 80 countries, includ- locating the new regional totals on the basis of each
ing China and several PSU econoriues.
country's share in the original companson.
The -international dollar" (l$) has the same pur- Such a method does not permit.the comparison
chasing power over total GNP as the US. dollar in a of more detailed quantities (such as food consumpgiven
year but purchasing power over subaggre- tion). Hence these subaggregates and more detailed
gates is determined by average international prices expenditure categories are calculated using world
at that level rather than by US. relative prices. prices. These quantities are indeed comparable in-
These dollar values, which are different from the ternationally, but they do not add up to. the indidollar
values of GNP or GDP.shown in Tables 1 and cated GDPs because they are calculated at a differ-
3 (see the technical notes for these- tables), are ob- ent set of pnces.-
taned by. special conversion factors designed to Some countries belong to several regional
equalize the purchasing powers of currencies m the groups. A few of the group have priority; others are
respective countries. This conversion factor, the pur- equal. Thus fudty is maintained between members
chasing power parity (PPP), is defined as the num- of the European Union, even within the OECD and
ber of units of a country's currency.required to buy world comparisons. For Austria and Finland, howthe
same amounts of goods and services in the do- ever, the bilateral relationship that prevails within
mestic market as one dollar would buy in the the OECD comparison is also the one used within
United States. The computation involves deriving the global comparison. But a significantly different
implicit quantities from national accounts expendi- relationship (based on Central European prices)
ture data and specially collected price data and thenr prevails in the comparison within that group, and
revaluingtheimplicitquantitiesineachcountryata this is the relationship presented in the separate
single set of average prices. The average price index publication of the European.comparison.
thus equalizes dollar prices in every country so that To derive ICP-based 1987 figures for countries
cross-country comparisons of ONP based on them that are.yet to participate in any ICP survey an estireflect
differences in quantities of goods and ser-. mating equation is first obtained by fitting the folvices
free of price-level differentials. This procedure lowing regression to 1987 data:
is designed to bring aoss-country comparisons in
line vith cross-time real value comparisons that are ln(r) = 05932 ln(ATLAS) + 026 In(mL) + 0.6446;
based on constant price series. (0.298) (0.0552) (0.1676)
The ICP figures presented here are the results of a Ra or30 AdJR-Sq 0.95 N 80
two-step exercise. Countries withiin a region or
group such as the OECD are first compared using where all variables and estimated values are extheir
own group average prices. Next, since group pressed as US = 100 and where
average prices may differ from each other, mal