Tyranny of numbers

In this post I explain the logic of the Purchasing Power Parity (PPP) exchange rates (also known as the PPP conversion factors) that economists use to measure an economy’s total production. I also show why PPPs are especially important for measuring changes in the living stands of Iranians in recent decades. In this post I will repeat some of the discussion in a previous post, while adding more intuition and detail. Given the frequency with which misleading analyses of Iran’s economic performance and living standards appear in the popular and professional press, this will probably not be my last discussion of the subject.