The International Comparison Program: Current Status and Problems
Irving B. Kravis
Robert E. Lipsey
This paper reviews the International Comparison Program (ICP), a worldwide
effort to produce international comparisons of real GDP and its components and
purchasing power parities of currencies (PPPs). The robustness of results and
future work are considered.
A generous estimate of margins of uncertainty in the benchmark estimates
might be 20-25 per cent for low-income countries and 7 per cent for high-income
countries. The errors in extrapolations to countries not covered by the surveys
could go as high as 30-35 per cent. That is still a small range of error compared
to that stemming from the use of exchange rates to convert own-currency to
common currency measures of output. Furthermore, exchange rate conversions are
even more sensitive to methodology than PPP conversions. The notion that
exchange comparisons rest on a simple and transparent procedure using standard
market data is illusory.
The future of ICP measures seems assured in Europe, particularly in the
European Community. The prospects for systematic worldwide comparisons do not
look as bright. A renewed effort by the United Nations Statistical Office and
the World Bank would be needed to maintain an ICP with comprehensive coverage
and comparable methods in all major regions.
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