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Food for thought

机译:思考的食物

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How fast is the world economy growing? How important is China as an engine of growth? How much richer is the average person in America than in China? The answers to these huge questions depend crucially on how you convert the value of output in different countries into a common currency. Converting national GDPS into dollars at market exchange rates is misleading. Prices tend to be lower in poor economies, so a dollar of spending in China, say, is worth a lot more than a dollar in America. A better method is to use purchasing-power parities (PPP), which take account of price differences. The theory of purchasing-power parity says that in the long run exchange rates should move towards rates that would equalise the prices of an identical basket of goods and services in any two countries. This is the thinking behind The Economist's Big Mac index. Invented in 1986 as a light-hearted guide to whether currencies are at their "correct" level, our "basket" is a McDonalds' Big Mac, which is produced locally in almost 120 countries.
机译:世界经济增长有多快?中国作为增长引擎的重要性如何?美国的普通人比中国的富人多多少?这些巨大问题的答案关键取决于您如何将不同国家/地区的产出价值转换为通用货币。以市场汇率将国家GDPS转换为美元具有误导性。在贫穷的经济体中,价格往往更低,因此,例如,在中国花费1美元,比在美国花费1美元多得多。更好的方法是使用购买力平价(PPP),它考虑了价格差异。购买力平价理论说,从长远来看,汇率应朝着使任何两个国家相同一揽子商品和服务的价格均等的汇率发展。这就是《经济学人》的巨无霸指数背后的思想。我们的“篮子”是1986年发明的,它是货币是否处于“正确”水平的轻松指南,是麦当劳的巨无霸,在大约120个国家/地区生产。

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