alt Hacker NewsPlease avoid using PPP. The fact that some country has cheap potato or consumer electricity rates doesn't mean a worker can buy more iphones or macbooks with their salary. Macbooks and iphones actually cost more than in the West in our country which is "4th world economy" in your rating.
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Yeah but in some sense you can't use any number because we're comparing the incomparable. "Larger economy" isn't a well defined term. And we can't measure it based on nominal GDP because that involves exchange rates and they depend on factors other than economic size.
It could be said that the US was the largest economy when it was 10x the next by most measures, because it was clearly just better than the alternatives. Not so much now (their model still turns out the best per-capita numbers for a large country though).
The more important measure is really who has the economy best configured to win a war. I expect China to be able to out-produce the US at mass cheap components, especially for drones, so for military purposes I'd expect China to have the long term edge in the sort of moderate intensity conflict we're seeing around the globe. Hard to be confident though, and the exact nature of such a war is unclear because diplomacy would be a huge factor.
> The fact that some country has cheap potato or consumer electricity rates doesn't mean a worker can buy more iphones or macbooks with their salary.
Same can be said about paying 100x more on prescription drugs and counting that as GDP. Also having the most expensive french fries doesn't make it a bigger economy just because iphones are cheaper.
Gross Domestic Product is measuring *domestic* output, so adjusting for *domestic* pricing makes sense.
Measuring it in a foreign currency doesn’t without accounting for that is just answering “how many iphones can country X afford” (handwaving away the nuances of what GDP measures with “afford”) which might be a statistic you care about but probably isn’t (and isn’t for the point that was being made).