A note on methodologies used in a comparison of purchasing power parities and real economic aggregates in fifteen African countries

Abstract

International comparison of national income aggregates are of importance and much interest at the world level. Comparability is, however, influenced by the extent to which the national accounting practices conform to international standards. But a more fundamental problem for meaningful comparison evolves from the basis on which national value aggregates are brought to comparable units. Traditionally this has been done through the use of market currency exchange rates to convert the national product and its aggregates into some common currency. These, however, do not give meaningful comparisons. The problems are even greater when market exchange rates fluctuate freely and frequently.

In order to overcome these problems the International Comparison project has addressed itself to the development and implementation of techniques for achieving international comparability of the real quantity of GDP and its aggregates. The basis for this conversion has been through the use of purchasing power parities. This paper outlines the methodology used for the African Comparisons of Phase IV for the reference year 1980, which was coordinated by the Statistical Office of the European Communities.