Dean Baker — China as Number One: The Relative Size of the U.S. and Chinese Economies

PPP rather than GDP.

Purchasing power parity calculations of GDP attempt to measure all the goods and services produced by a country with a common set of prices. This means we add up all the cars, tables, haircuts, knee surgeries etc. produced in both the U.S. and China, and assume that each item costs the same in both countries.

According to the projections from the I.M.F. China's GDP is already 25 percent larger by this measure and will be almost 50 percent larger by the end of the projection period in 2022….

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China as Number One: The Relative Size of the U.S. and Chinese Economies
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C.