Conversion factors : a discussion of alternate rates and corresponding weights

The significant operational implications underlying the Bank's estimates of per capita GNP, represent important considerations in systematizing the use of official rates in determining the exchange rate to be used in the Atlas methodology. This paper discusses issues and procedures to develop a time series of alternative conversion factors with corresponding weights for use in converting and presenting macro-level country statistics in a common unit of account, e.g. the U.S. dollar. The focus of the paper is on conversion factors that are representative of transaction or"effective"conversion factors. It also emphasizes the implications for Bank estimates of per capita, the kinds of evidence relevant in assessing the underlying conversion factors, and identifies countries where review of the official exchange rate merits serious consideration. The paper reviews the main concerns about the adequacy of the official exchange rate as a conversion factor.