INTERNATIONAL COMPARISON OF PURCHASING POWER, REAL OUTPUT AND LABOUR PRODUCTIVITY: A CASE STUDY OF BRAZILIAN, MEXICAN AND U.S. MANUFACTURING, 1975

This study has a twofold objective: (a) a substantive analysis of purchasing power parities (PPP's), real output and labour productivity in Brazil, Mexico and the U.S.A.; and (b) a methodological survey of the analytic problems in measuring PPP's from the production side, rather than the expenditure approach used by the United Nations (ICP). Our main substantive findings were that PPP's for manufacturing did not vary greatly from the 1975 exchange rates, that labour productivity was surprisingly high in the two Latin American countries, and that there are substantial differences in the coverage of national accounts between Mexico and Brazil. We found census concepts of value added to be rather anachronistic, particularly in the U.S.A.; we developed a new short-cut matching procedure for industries with a complex product structure; and we found the unit value approach not inferior to the specification pricing practiced by ICP.