Quote:
Originally Posted by Officer of Engineers
Sorry, Tronic, you're not getting it. The 25 cents advantage stays in India. Once outside of India, it disappears. It doesn't translate. If I come into India, my $12 does not become 25 cents. It is still $12. Even if I buy that 1 kg, I will still have $11.75 left, it doesn't disappear.
What internet economists have been trying to say is that per PPP, India controls the world economy in 4th place. That is extremely far from the truth. Your 25 cents is still 25 cents no matter where it is on earth. The value of the product may change but that is the value of the product, not your money. You do not have $12. You have 25 cents.
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Sir, I'm very lost. Ok sir, so comparing Indian $12 with Canadian $12; well then although on the world stage they'd be equivalent, wouldn't that actually mean that in India, the person with that $12 can do a lot more with that money then the person in Canada with those $12 can do??? Which I believe is already the case. The goods and products are cheaper, because the labour is cheaper, and hence those $12 in India can buy a lot more stuff then those $12 in Canada can buy. So in those terms, is PPP not more useful to calculate? Sir, i think it directly calculates the cost of living and compares how much the people can consume.