Theoretical foundations of the "Geary method" for international comparisons of purchasing power and real incomes

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Title: Theoretical foundations of the "Geary method" for international comparisons of purchasing power and real incomes
Authors: Neary, J. Peter
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Date: 18-Jan-1996
Abstract: This paper provides a centenary review of the method of calculating real incomes and purchasing power parities proposed by Roy Geary. This method is the most widely used in major international comparisons, but it is often criticised for its lack of theoretical foundations. I discuss the properties of the method and its competitors in the light of both practical and theoretical considerations. I also propose a new method of computing "true" or, as I call them, "Geary-Konus" exchange rates and world prices and I argue that the Geary method provides the best available approximation to the true values.
Funding Details: Not applicable
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP96/03
Keywords: International comparisons of Real IncomesExchange ratesPurchasing power paritiesPrice indexesR.C. Geary
Subject LCSH: Income--Mathematical models
Purchasing power--Mathematical models
Foreign exchange rates
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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