Читать книгу The Emerging Markets Handbook - Pran Tiku - Страница 41

This measures the output of a country. It takes a country’s GDP and divides it by the number of people in a country. Most nations grow quickly until they reach a GDP per capita of $5000. At this point most tend to fall into a so-called middle income trap, defined as GDP per capita between $5000 and $15,000. At this level, economic growth tends to decelerate to around 5% per annum.

For our purposes, we will compare the GDP per capita on a purchasing power parity (PPP) basis. PPP states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. It is based on the assumption that in the absence of duties, transaction costs and other curbs, identical goods should have the same price in different countries when expressed in the same currency.

PPP is used here because it is a simpler way of comparing economic output between two countries. It removes the distortions that come with inflation and other transaction costs, which otherwise make the price of an identical product differ between two countries.

The World Bank data used in the charts is based on gross domestic product converted to international dollars using purchasing power parity rates.