The Penn World Table (PWT) is a set of national-accounts data developed and maintained by scholars at the

University of California, Davis The University of California, Davis (UC Davis, UCD, or Davis) is a public land-grant research university near Davis, California. Named a Public Ivy, it is the northernmost of the ten campuses of the University of California system. The institut ...

and th
Groningen Growth Development Centre
of the

University of Groningen The University of Groningen (abbreviated as UG; nl, Rijksuniversiteit Groningen, abbreviated as RUG) is a Public university#Continental Europe, public research university of more than 30,000 students in the city of Groningen (city), Groningen in ...

to measure

real GDP Real gross domestic product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e. inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity ...

across countries and over time. Successive updates have added countries (currently 183), years (1950-2019), and data on

capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...

productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...

employment Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...

and

population Population typically refers to the number of people in a single area, whether it be a city or town, region, country, continent, or the world. Governments typically quantify the size of the resident population within their jurisdiction using a ...

. The current version of the database, version 10, thus allows for comparisons of relative

GDP per capita Lists of countries by GDP per capita list the countries in the world by their gross domestic product (GDP) per capita. The lists may be based on nominal or purchasing power parity GDP. Gross national income (GNI) per capita accounts for inflows ...

, as a measure of

standard of living Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...

, the

productive capacity Productive capacity is the maximum possible output of an economy. According to the United Nations Conference on Trade and Development (UNCTAD), no agreed-upon definition of maximum output exists. UNCTAD itself proposes: "the productive ''resources'' ...

of economies and their productivity level. Compared to other databases, such as the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...

World Development Indicators World Development Indicators (WDI) is the World Bank’s premier compilation of international statistics on global development. Drawing from officially recognized sources and including national, regional, and global estimates, the WDI provides acces ...

, the time period covered is larger and there is more data that is useful for comparing productivity across countries and over time. A common practice for comparing

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

s across countries has been to use

exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...

s. However, this assumes that this relative price – based on traded products – is representative of all relative prices in the economy, i.e. that it represents the

purchasing power parity Purchasing power parity (PPP) is the measurement of prices in different countries that uses the prices of specific goods to compare the absolute purchasing power of the countries' currency, currencies. PPP is effectively the ratio of the price of ...

(PPP) of each currency. By contrast, PWT uses detailed prices within each country for different expenditure categories, regardless of whether the output is traded internationally (say, computers) or not (say, haircuts). These detailed prices are combined into an overall relative price level, typically referred to as the country's PPP. The detailed prices used to compute PPPs are based on data published by the

as part of the

International Comparison Program The International Comparison Program (shortened ICP) is a partnership of various statistical administrations of up to 199 countries guided by the World Bank. The main partners of this program are the World Bank, IMF, UN, ADB, OECD, CISSTAT, Eu ...

(ICP). An empirical finding documented extensively by PWT is the

Penn effect The Penn effect is the economic finding that real income ratios between high and low income countries are systematically exaggerated by gross domestic product (GDP) conversion at market exchange rates. It is associated with what became the Penn Wo ...

, the finding that real GDP is substantially understated when using exchange rates instead of PPPs in comparing GDP across countries. The most common argument to explain this finding is the Balassa-Samuelson effect, which argues that as countries grow richer, productivity increases mostly in manufacturing and other traded activities. This drives up wages and thus prices of many (non-traded) services, increasing the overall price level of the economy. The result is that poorer countries, such as China, are shown to be much richer based on PPP-converted real GDP than based on exchange-rate-converted GDP. The database gets its name from the original developers at the University of Pennsylvania,

Robert Summers Robert Summers (June 22, 1922 – April 17, 2012) was an American economist and professor at the University of Pennsylvania, where he taught from 1960. A widely cited early work by Summers is on the small-sample statistical properties of alternate ...

Irving Kravis Irving B. Kravis (1917 – January 3, 1992) was an American economist, best known for his work on international price comparisons, leading to the first version of the Penn World Table. Early life and education Kravis was born in 1917. He obtain ...

and

Alan Heston Alan W. Heston (born 1934 in Portland, Oregon) is an American economist best known for his collaborative work with fellow economist Robert Summers and the development of the Penn World Table (PWT). Education and early life Heston was born October ...

.Robert Summers and Alan Heston (1991). "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," Quarterly Journal of Economics, 106(2), pp. 327-368.

Notes

References

* Irving B. Kravis, Alan W. Heston, and

, 1978. "Real GDP Per Capita for More Than One Hundred Countries," ''Economic Journal'', 88(350),
p. 215
242. * Alan Heston and Robert Summers, 1996. "International Price and Quantity Comparisons: Potentials and Pitfalls," ''The American Economic Review'', 86(2),
p. 20
24. * Simon Johnson ''et al.'', 2009. "Is Newer Better? The Penn World Table Growth Estimates

7 December, VOX.

External links

Penn World Table
version 9
Penn World Table
{{Webarchive, url=https://web.archive.org/web/20130113121349/https://pwt.sas.upenn.edu/ , date=2013-01-13 , earlier versions

National accounts Global economic indicators Welfare economics

See also

Notes

References

External links