MULTILATERAL COMPARISONS OF OUTPUT, PRODUCTIVITY, AND PURCHASING POWER PARITIES IN MANUFACTURING

This paper presents multilateral comparisons of output, productivity and purchasing power parities in manufacturing, for 1975 and 1987. Two multilateral approaches are considered, namely the Geary–Khamis method and the generalized Theil–Törnqvist method based on the EKS procedure. The paper discusses the problem of lack of additive consistency of the generalized Theil–Törnqvist index and the absence of constant price comparisons within this framework. Some procedures that lead to near additive consistency are proposed. The empirical results show that multilateralization does not substantially affect the results and that both the Geary–Khamis and the generalized Theil–Törnqvist index give results comparable to the binary comparisons.