<HEAD> <META content="MSHTML 6.00.2800.1400" name=GENERATOR></HEAD> <BODY> <DIV> <META content="MSHTML 6.00.2800.1400" name=GENERATOR> <DIV> <META content="MSHTML 6.00.2800.1400" name=GENERATOR> <DIV><FONT size=2>>I might be for a purchasing power system - IF it tried to intuitive as you suggest.  But in the World Bank's PPP world >the Chinese worker makes 400% more than in the money world because PPP (in effect) assumes he could come to the >U.S. and do the same work (or my example of the haircutter in Nairobi market).  But, of course, the Chinese worker >can't and that is one reason why he is poorer.  He would hardly think it intuitive or commonsense to assume he could.  >The Chinese have  been made to look four times richer (than some other comparison) by assumptions that do not exist >for them as real options and thus partly excuse away their poverty</FONT>.  </DIV> <DIV> </DIV> <DIV><FONT size=2>On the other hand, if PPP gives you a measure of relative wealth without respect to the arbitrariness of international financial markets, then it makes a lot of sense. Wealth and poverty are relative measures, and while nations are arbitrary units of comparison, I doubt the Chinese worker you mention experiences her poverty relative to someone in New York or London. More likely, she experiences poverty relative to someone in her own town or Beijing. (Unless she is living in abject, life-threatening poverty, in which such comparisons don't make any sense.)  I think that PPP is actually closer to capturing *both* the fact that it's apples and oranges *and* the principle of international comparability than any other relative wealth index. Using different bases of comparison is a really good idea, in this respect.</FONT></DIV> <DIV><FONT size=2></FONT> </DIV> <DIV><FONT size=2>Christian</FONT></DIV></DIV></DIV></BODY><PRE> </PRE>