The impact of considering regional purchasing power

Parity on macroeconomic magnitudes. The effect on the classification of regions in European cohesion funds The impact of considering regional purchasing power parity on macroeconomic magnitudes. The effect on the classification of regions in European cohesion funds . Twitter Share on Facebook Share on LinkedIn Compartment in Google Plus By Vittorio  Head of the Economics Area, IERMB – Associate Professor, Department of  Economics, UAB Introduction There is extensive literature that confirms that the cost of goods and services varies between countries, but also between regions of the same country, and that differences in territorial price levels indicate differences in the cost of living.

These differences within countries

Important implications for the well-being of residents in different territories and are important from a policy design perspective. A work that addresses this issue.  By Sweden WhatsApp Number Data  with the author of this note, has been recently published in the journal of the International Association of Official Statistics . Traditionally, these subnational macroeconomic magnitudes have been  across countries by adjusting them using exchange rates or national purchasing power parities . However, these methods can lead to significantly  adjustments for the regions of a country: since national PPPs do not take into.  Account differences in regional price levels, they can produce values ​​of economic magnitudes that are  at the subnational level.

In fact, adjusting macroeconomic

Variables through the use of a national price deflator implies an artificial increase in these variables in the most developed regions and a decrease in the lagging  India WhatsApp Number List regions. As a result, inaccuracy or imprecision of regional economic  variables could lead to  evaluation and.  Consequently. Inappropriate policy design. But despite this  to have regional price indices, a homogeneous methodology at an international level for their calculation has not yet been purchasing power parities, “it is  Member States to produce regional PPP data. National and subnational level for the states.