Definition: Comparative price levels

Purchasing power parities

These are the ratios of PPPs to exchange rates. They provide a measure of the differences in price levels between countries by indicating for a given basic heading or aggregate the number of units of the common currency needed to buy the same volume of the basic heading or aggregate in each country. At the level of GDP they provide a measure of the differences in the general price levels of countries.
Eurostat and Organization for Economic Cooperation and Development (OECD), "Eurostat - OECD Methodological manual on purchasing power parities (2005 Edition)", Methods and Nomenclatures, Office for Official Publications of the European Communities, Luxembourg, 2006

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