GDP is divided into nominal GDP, real GDP, and GDP reflecting purchasing power parity, depending on the method of measurement. Nominal GDP is calculated based on current prices, so if inflation is serious, GDP may increase even if production does not increase. Thus, the comparative study mainly uses real GDP that holds prices fixed in a particular year. On the other hand, GDP PPP represents the actual capability of a person regarding purchasing goods, reflecting the country's price level. This is summarized in the following table.

Since nominal GDP is vulnerable to external shock that causes price change such as economic crisis, war, and disaster, it should be considered more carefully before using nominal GDP. Thus, real GDP is much more used in academic area. However, if you are trying to do a research on comparative studies, real GDP(PPP) could give more practical results than real GDP. GDP (PPP), representing the actual purchasing power, reflects the country's price level. This is a similar concept to the commonly known 'Big Mac Index', a useful indicator for identifying the actual purchasing power of individual countries. In other words, the GDP(PPP) standardized the '$1' to have the same purchasing power in all countries by reflecting the price levels of individual countries.

Commonly known 'nominal GDP' and 'real GDP' use market exchange rate of US dollar which means that GDP of each country calculated in its currency, is converted to US dollar. Then what happens to GDP reflecting PPP? The currency that is used for GDP (PPP) is hypothetical unit called International Dollar. The price level of this unit is based on the United States, which means that 1$ of US dollar equals to 1$ of International Dollar. As you can see in [Table 1], the difference between GDP and GDP (PPP) is exchange rate. Nominal or real GDP use market exchange rate of US dollar to each country's currency while GDP (PPP) uses PPP which is an exchange rate of International Dollar to each country's currency. The raw data of PPP are provided in World Bank, Eurostat, OECD, Penn World Table.

Small changes in data might cause a varitation in the results. The differences between real GDP per capita and real GDP (PPP) per capita are as follows: The figure below is a visualization of the 2017 GDP(PPP, constant in 2011) minus the 2017 real GDP per capita (constant in 2010). Due to the lack of data, there is a difference in the base year of the constant price, so one should be careful when construing . The figure on the left shows a relatively higher GDP per capita of the PPP in Asia, with $2,696.5 in Africa, $8,816.8 in Asia, $4,128.5 in North America, $892 in Oceania, and $4,691.4 in South America. The figure on the right is a visualization based on level of real GDP per capita. X axis of the figure is categorized into five GDP per capita levels. It shows a difference of more than $10,000 in the $10,000 to $30,000 section, which means GDP(PPP) is much more higher than real GDP. On the other hand GDP(PPP) is apparently lower than real GDP by difference of -1,942 in countries over $40,000. This means that high-income countries have high price levels and relatively low price level in mid-income countries ($10,000 to $30,000). Singapore, Qatar, and the United Arab Emirates, among countries with real GDP of more than $40,000 per capita, have lower price level than other high-income countries, indicating that per capita GDP of the purchasing power index is significantly larger than that of real GDP per capita.

GDP(PPP) data from the World Bank and the Penn World Table, produced by Groeningen University, are widely used in research. World Bank currently provides data from 1990 to 2019, while Groeningen University provides data from 1950 to 2019. There are several other differences such as observations. In case of Asia, Syria, Taiwan, and Yemen are missing in World Bank, while Afghanistan and East Timor are missing in Penn World Table. Both GDP(PPP) data from World Bank and Penn World Table could be found on the ARIC hompage.

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