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Indicators of greatest importance in macro-economics are:

  1. the gross domestic product (GDP → comparison and growth of wealth)
  2. the consumer price index (CPI → inflation rate)
  3. purchasing power parity (PPP → comparison and growth of wealth)

One single most important indicator seems to be the GDP per capita, inflation- and PPP-adjusted.

Each of these indicators is based on some kind of – complete, restricted, weighted, or representative – basket of goods (or market basket). Their underlying concepts (esp. "actual prices") and their methodologies:

  • how to determine and weight prices
  • how to balance contradictory numbers
  • how to yield accuracies of less than 0.1%

have a lot in common, but also differ considerably – as do their purposes.

My questions are:

  • How much do the concepts and methodologies of GDP, CPI, PPP overlap?

  • Is there a reference that treats and compares the concepts and methodologies of GDP, CPI, and PPP on a common basis and discusses correlations?


References:

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