Go to FRED (the Federal Reserve Economic Database) table "Purchasing Power Parity Converted GDP Per Capita Relative to the United States, average GEKS-CPDW, at current prices for China" (http://research.stlouisfed.org/fred2/series/PGD2U2CNA621NUPN). Update and explain the graph found here and in the chapter.

Question

Quizplus · Accepted Answer

The Answer is $We note that the table only goes through 2010. No problem-we have a solution for that: Growth of this ratio (PPP per Capita China GDP)/(PPP per Capita GDP USA) approximately equals Growth of (PPP per Capita China GDP) - Growth of (PPP per Capita GDP USA) or Now (2014) per capita income is about 25 percent of that of the United States. See below: \begin{array}{lrrr} &&& ext { PERIOD }\ ext { CHINA } & 2010 & 2014 & ext { Growth Rate }\ ext { Real PPP GDP USD BILLIONS } & 12268 & 17411 \ ext { Population MILLIONS } & 1318.2 & 1346.6 \ ext { Per Capita GDP USD } & & \ ext { THOUSANDS } & 9.30663 & 12.9296&138.9 \%\ \ ext { United States }\ ext { Real Base (PPP) GDP USD } & 14783.8 & 16085.4 \ ext { Population } & 309.3 & 319 \ ext { Per Capita GDP USD } & & \ ext { THOUSANDS } & 47.79761 & 50.42445&105.5 \%\ \ ext {RATIO}&19.5\%* & 25.6 \% \end{array} * Differs from chart 2010 figure of 21.5 percent due to GDP revisions since chart was published. From Penn Tables ( HYPERLINK https://pwt.sas.upenn.edu/Documentation/append61.pdf https://pwt.sas.upenn.edu/Documentation/append61.pdf), which is an attempt to estimate the U.S. dollar value of every good in China (importantly: what the actual dollar price would be of services in China but if those services could be sold in the United States). So PPP here is defined more broadly to include all goods (traded plus non-traded), which is a different definition from the PPP exchange rate, which generally only applies to traded goods. Or to quote Appendix 61 of the Penn tables: Purchasing power parity is the number of currency units required to buy goods equivalent to what can be bought with one unit of the base country. We calculated our PPP over GDP. That is, our PPP is the national currency value of GDP divided by the real value of GDP in international dollars. International dollar has the same purchasing power over total U.S. GDP as the U.S. dollar in a given base year (1996 in PWT 6.1).$ We note that the table only goes through 2010. No problem-we have a solution for that:
Growth of this ratio (PPP per Capita China GDP)/(PPP per Capita GDP USA) approximately equals
Growth of (PPP per Capita China GDP) - Growth of (PPP per Capita GDP USA) or
Now (2014) per capita income is about 25 percent of that of the United States. See below:

\begin{array}{lrrr}&&& ext { PERIOD }\ ext { CHINA } & 2010 & 2014 & ext { Growth Rate }\ ext { Real PPP GDP USD BILLIONS } & 12268 & 17411 \ ext { Population MILLIONS } & 1318.2 & 1346.6 \ ext { Per Capita GDP USD } & & \ ext { THOUSANDS } & 9.30663 & 12.9296&138.9 \%\\ ext { United States }\ ext { Real Base (PPP) GDP USD } & 14783.8 & 16085.4 \ ext { Population } & 309.3 & 319 \ ext { Per Capita GDP USD } & & \ ext { THOUSANDS } & 47.79761 & 50.42445&105.5 \%\\ ext {RATIO}&19.5\%* & 25.6 \%\end{array}

* Differs from chart 2010 figure of 21.5 percent due to GDP revisions since chart was published.
From Penn Tables ( HYPERLINK "https://pwt.sas.upenn.edu/Documentation/append61.pdf" https://pwt.sas.upenn.edu/Documentation/append61.pdf), which is an attempt to estimate the U.S. dollar value of every good in China (importantly: what the actual dollar price would be of services in China but if those services could be sold in the United States). So PPP here is defined more broadly to include all goods (traded plus non-traded), which is a different definition from the PPP exchange rate, which generally only applies to traded goods. Or to quote Appendix 61 of the Penn tables:
Purchasing power parity is the number of currency units required to buy goods equivalent to what can be bought with one unit of the base country. We calculated our PPP over GDP. That is, our PPP is the national currency value of GDP divided by the real value of GDP in international dollars. International dollar has the same purchasing power over total U.S. GDP as the U.S. dollar in a given base year (1996 in PWT 6.1).

Go to FRED (The Federal Reserve Economic Database) Table "Purchasing