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Economic Analysis Division (613-951-5687)
See Baldwin and Macdonald (2009) for a more extensive background paper.
Our estimate of long-run purchasing power parity is taken from the 1999 benchmark produced by Statistics Canada, with extrapolations forward and backward using the ratio of the GDI deflator in Canada relative to the GDI deflator for the US. The reference year makes use of a select set of prices that Statistics Canada collects for the OECD program that calculates prices for inter-country comparison of GDP. The extrapolations use the price ratios for a finer level of detail of goods and services than enter into the calculation of the reference years. The GDI purchasing power parity reference year calculation uses only final domestic expenditure prices.
Baldwin, J.R. and B. Yan, 2004, “The Law of One Price: A Canada-US Exploration.” 50, 1: 1-10.
See Deaton, Angus and Heston, Allan,” Understanding PPPs and PPP-Based National Accounts”, Cambridge, MA; National Bureau of Economic Research, Working Paper 14499, November 2008.
