Misunderestimating' Living Standards

Publication Date:

Publisher: Center for Economic and Policy Research

Author(s): John Schmitt; David Rosnick

Research Area: Economics

Keywords: Standard of living; Exchange rates; Purchasing power parity

Type: Report

Coverage: United States

Abstract:

This issue brief finds that a forecast by Oxford Economics suggesting that the United Kingdom’s living standards will exceed those of the U.S. in 2008 is misleading. CEPR found that the forecast relies on a basic misunderstanding of standard methods of comparing international standards of living. Using the appropriate economic method, in 2008, the GDP per capita of the United States will exceed that of the United Kingdom by almost 19 percent.