Alternative Measures of OECD Output Growth and Inflation

The paper addresses two problems: (i) how to measure aggregate real output and inflation for a group of countries and (ii) how to construct measures of real GDP for a group of countries where the country measures of real GDP are comparable across time and space. In order to address the second problem, it is necessary that the group of countries construct at least one set of Purchasing Power Parities (PPPs). The OECD constructs PPPs for its 34 member countries on an annual basis and publishes these PPPs and related measures of GDP and so OECD data for the years 2000-2012 are used to study the above two problems. The paper proposes a new method for harmonizing conflicting estimates of member country real GDP (that arise from the PPP generated cross sectional estimates of relative GDP) with estimates of country GDP that are consistent with national growth rates of GDP.