Luis Bértola (Universidad de la República, Uruguay)
Carolina Román (Universidad de la República, Uruguay)
International comparisons of pre-1950 per capita GDP levels are mainly based on Angus Maddison´s database which is expressed in 1990 international Geary-Khamis dollars. This means that in order to obtain relative per capita GDP levels, we use a retropolation of the 1990 relative levels by the growth rate of per capita GDP at constant prices of each country. Besides the well-known Maddison database a new set of estimates for the Latin American countries, based on Maddison´s 1990 benchmarks, but using other GDP series, is found in Bértola and Ocampo (2010). The risks of using this procedure are obvious and are mainly dependent on changes in relative prices within countries and between countries. The problems arising from this procedure are added to the quality of GDP per capita estimates, particularly in earlier times, in the different countries, thus making historical comparisons risky.
The purpose of this paper is to make a first attempt to test the changes in relative per capita GDP and real wage levels that arise by using different purchasing power parities prior to World War I and for the inter-war period. The PPP estimates presented in this paper are so far limited to a consumption basket, which is not the consumption basket of any particular country, but the one that Jeffrey Williamson (1995) used to construct his real wage database. This consumption basket is adapted from country to country according to the special diet, but trying to keep a similar structure of intakes of calories, proteins, carbohydrates and fat. The paper presents a new set of purchasing power adjusted exchange rates and purchasing power adjusted per capita GDP and real wages for a group of five Latin American countries (Argentina, Brazil, Chile, Colombia and Uruguay). The PPP estimates are based on consumption baskets in two benchmark years: around the turn of the century and the interwar years. The results obtained using different available GDP estimates and wages at current prices are compared to the commonly used international comparisons provided by the Maddison dataset at 1990 international Geary-Khamis dollars in the case of per capita GDP, and with the Williamson database for wages.
