Alternative measures of output in global economic-environmental models : Purchasing power parity or market exchange rates ?

@inproceedings{Nordhaus2005AlternativeMO,
  title={Alternative measures of output in global economic-environmental models : Purchasing power parity or market exchange rates ?},
  author={William Nordhaus},
  year={2005}
}
The study examines the question of the use of purchasing power parity versus market exchange rates in constructing global economic models. It compares three approaches: MER accounts, world-price PPP accounts, and superlative PPP accounts. It concludes that the best approach is to use superlative PPP accounts. This approach uses cross-sectional PPP measures… CONTINUE READING