Letter: A true measure of national wealth

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Sir: Gavyn Davies claims (1 February) that 'international economists have been labouring for years under an important misapprehension' in that they have been using estimates of the world economy at market exchange rates rather than purchasing power parities. Let him speak for himself; economists involved in the international aspects of both energy and environmental problems have been using purchasing power parities for at least 10 years. Some in the field of international economics proper, such as John Williamson of the Institute for International Economics in Washington, have been doing so for almost as long.

None the less, it would be churlish not to welcome the conversion of Gavyn Davies in this respect. Incidentally, a 'quick and dirty' extrapolation of the 1991 estimates to 1993 would put the Russian Federation some way below Brazil in terms of absolute GDP at PPP; this means that the United Kingdom has now moved up to eighth place in terms of absolute size of economy.

I suppose we can expect government ministers here to cite the 'overtaking' of Russia by the United Kingdom as excellent news and a real tribute to government economic policy.

Yours faithfully,

DONALD ROY

London, SW15

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