You warned me and yet nothing could prepare me for it when it happened
@Krblkn2 жыл бұрын
Fuc had dozed of watching this and suddenly it happened. Thought a bomb went of with my woofer setup 🤣
@nusaibahibraheem818310 ай бұрын
I thought tbe lighting will change at the end
@ALC0LITE4 жыл бұрын
Finally found a video that helped me wrap my head around PPP. So many other sources mentioned "a basket of goods" but not what that term actually meant.
@gconomics37664 жыл бұрын
Thanks, pleased it was useful.
@kurniawan5723 Жыл бұрын
So the basket of goods for purchasing power parity, they are using only big Mac MC Donald prices? Not other good or services ?
@sulkel Жыл бұрын
@@kurniawan5723 no
@shahjahanahmad3029 Жыл бұрын
Well done mate. You've helped this first-year BSc econ student. Thank you
@brunxs2086 жыл бұрын
Got a jumpscare at 5:30 lol :0
@brunxs2086 жыл бұрын
I mean 5:40 xD
@krisjankorf37546 жыл бұрын
RIP headphone users @ 5:39
@gconomics37666 жыл бұрын
Haha, apologies!
@youngterk21015 жыл бұрын
RIP myself haha
@travelwell80985 жыл бұрын
haha!
@maurolevy51473 жыл бұрын
I was warned... And I still jumped, lol
@r0hith19993 жыл бұрын
Thanks for the heads up😂😂
@katrinabreidenbach90313 жыл бұрын
As a former Econ major refreshing some of the topics I learned in school, this was a great explanation using a clear example. Thanks for the video!
@gconomics37663 жыл бұрын
Great to hear!
@lokaman3546 жыл бұрын
really you are so great , best simple explanation, thanks alot
@howtofuckamockinbird7 жыл бұрын
Great video for those looking for a simple explanation for PPP. Cheers.
@Shxxib Жыл бұрын
Your username 💀💀
@X_A_ic5 жыл бұрын
This us a very simple and easy to understand explanation! Thank you so much... now I understand it
@gconomics37665 жыл бұрын
Excellent!
@matigon550 Жыл бұрын
Finally, I have understood what PPP means. Thanks for the simple and consice explanation.
@gconomics3766 Жыл бұрын
Glad it was helpful.
@Rachl12846 ай бұрын
I’m 18, I wanted to take statistics so I could better understand world bank metrics and such but lacked the prerequisites in math for my freshman year. I feel like I have a basic understanding of this stuff now, and I really appreciate your explanation, it was very clear and helpful :)
@cbaide1007 жыл бұрын
Very good explanation, thank you very much!
@dewiastari33814 жыл бұрын
good explanation , now im understand about gdp ppp :)
@Snowmanver24 жыл бұрын
Thank you, very helpful. That lightning was a bit hair-raising though....
@nealsawyers67232 жыл бұрын
Quality of content: 10/10 Quality of marker: 2/10 Great video, thanks for the straight forward explanation.
@bushrayasmeeneverydayvlogs27933 жыл бұрын
Best explanation and the way you explain sir is Amazing.. Thanks
@gconomics37663 жыл бұрын
Thanks and welcome
@MrVpassenheim6 жыл бұрын
That was beautiful!
@roshanbeadle24767 жыл бұрын
Very helpful, thank you.
@cherrycherie28415 жыл бұрын
So helpful! Thank you!
@albertuserwinsusanto9243 жыл бұрын
Awesome! Clear and concise! 棒棒哒!简洁易懂!
@gconomics37663 жыл бұрын
Glad it was useful.
@Mycatsbirthdayparty4 ай бұрын
As an American, Nominal GDP is grade A copetanyl from the west. Purchasing Power Parity is more of a true measure.
@amalibaisaac9394 Жыл бұрын
I have watched longer videos yet struggled to make sense of them. But this is very precise and simple to understand.
@tendayimasawi5931 Жыл бұрын
Simple illustration 👌
@prakharshrivastava4691 Жыл бұрын
Dude that outro scared the hell out of me!! Thanks for the video though..
@esterelmgart86962 жыл бұрын
Great video! thanks
@evocative48566 жыл бұрын
Best explanation on youtube, thank you.
@MrClayElf6 жыл бұрын
Very helpful!
@nikhilsmith90215 жыл бұрын
Outro still scares me Mr Clarke!
@abdallahferhi59523 ай бұрын
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@abdallahferhi59523 ай бұрын
In an interconnected world, many companies operate on a global scale. Global marketing involves understanding cultural differences, adapting marketing strategies to different markets, and navigating international
@barsbayar42523 жыл бұрын
Perfect explanation, thanks
@gconomics37663 жыл бұрын
Glad it was helpful!
@devondevon43665 жыл бұрын
4:41. Another way to look at it (and get the same result) is if USA's GDP is 16. Japan's GDP is 18, and if the cost of living is 3 times higher in Japan (A Big Mac is 6 dollars in Japan vs. just 2 dollars in the US, (as seen above), then US GDP would become 48 PPP (3 times 16) vs. 18 PPP for Japan (no change to Japan GDP.). By reducing this by dividing both by 3, you get 16 and 6. The problem with PPP is that though goods and services may be cheaper in one country, the person might not be able to travel as a tourist or purchase a college education in a foreign country where goods and services are more expensive (or buy an iPhone, etc. or country A with PPP GDP of 1 trillion won't have the same buying power as Country B with a nominal GDP of 1 trillion dollars, when it comes to oil (which is the price in dollars ) or buying an f-16 jet from the US unless Country A PPP GDP is the same as it nominal GDP such as US, or a country so where the price of a big mac in that country is the same as in the US) ), so 20,000 us dollar in country A might have the same buying power as 40,000 us dollar in the USA, but that 20,000 might not be enough to pay for tuition at a US college or to travel to the US and have the same buying power as a person in the US with a 40,000 dollar income. A second problem with PPP is that though goods and services might be cheaper in Country A, the quality might not be the same as in the US, so a bus ride in Country A might cost 1 US dollar vs. 3 US dollars in the USA, it might not run on schedule, ..... because of not enough buses, might be slower, etc.... and internet service might be cheaper but slower ... there might be longer waiting time to see a medical doctor or receive treatment though the cost might be lower than in the US. People pay for the quality of goods and services, so it costs more to watch a movie in HD than in SD, A college lab with 50 students is not the same as one with 25 students, a television (way back in the days) with no remote or just one station, is not the same as a television today. A streaming service with insufficient shows and movies is different from one with.
@giantmicrophone27765 жыл бұрын
Devon Devon thank you so much , it is going to help me on my midterms
@taihalpern73424 жыл бұрын
You can say it much simpler than that, since the usa’s gdp equivalentes to 8 baskets of goods while Japan can only buy 3, japans gdp is simply 3/8ths of the US’
@hihodoyouknow15764 жыл бұрын
Quality is always better than Quantity
@devondevon4366 Жыл бұрын
@@g.f.8983 Glad you find it helpful
@basketballjones11602 жыл бұрын
Finally, I can comprehend it. Thanks bro.
@gconomics37662 жыл бұрын
You're welcome
@drrajmmc3 жыл бұрын
So please tell us what are the basket of goods and services that are considered while calculating ppp of a country
@l.a5874 Жыл бұрын
Thank you, now i understand
@happyjoy98774 жыл бұрын
Nice explanation!!!
@gconomics37664 жыл бұрын
Glad it was useful
@ye70065 ай бұрын
Can’t believe I’m watching this video right now, not even for school or anything
@achusvlogs79222 жыл бұрын
Good explanation and thx dude
@gconomics37662 жыл бұрын
No problem 👍
@user-fl6uh1xp6h3 жыл бұрын
This lecture is so helpful!!
@gconomics37663 жыл бұрын
Glad it was helpful.
@maurolevy51473 жыл бұрын
Quick! Someone tell me where I can buy a $2 Big Mac!
@BUNNY-ek4ru Жыл бұрын
Thanks from Belgium!
@gconomics3766 Жыл бұрын
Welcome!
@travelwell80985 жыл бұрын
Good explanation! Thx.
@gconomics37665 жыл бұрын
Thanks ... pleased it was helpful.
@Linck19210 ай бұрын
So is this number actually calculated with the Big Mac index or was that just an example? When look up a random country on Wikipedia and go to the GDP PPP Per capita, is it based on Big Macs?
@alexandragopro39682 жыл бұрын
Excellent explanatio
@gconomics37662 жыл бұрын
Glad it was useful
@dediisafiahlaksana5 ай бұрын
terimakasih sekarang saya jadi paham
@Mohamedxamza7 жыл бұрын
PLEASE CAN YOU UPLOAD MORE FOR THE GCSE SPEC, PLEEEEEAAAAASSSEE!
@gconomics37667 жыл бұрын
I will be uploading one video per week on each extract.
@ojasvi-gm2ff8 ай бұрын
thank you great explanation but can u explain how from ppp i can actually know what my salary's value is actually as compared b/w different countries for example if i earn 100k in us and 100 k in japan by how much is 100k's value more in us than in japan
@m1kus960 Жыл бұрын
I want to choose a country to move to and the most important criterion for me is how much money I can save from my salary after all monthly expenses (after paying for housing and utilities, after paying for food and hygiene products, etc.), please tell me the rating that shows this , maybe it is GDP PPP per capita?
@Anishu111129 ай бұрын
the ending almost gave me a heart attack
@ROTHSTEIN014 жыл бұрын
Feeling like a Goldman Sachs partner
@JuliusWise11 ай бұрын
Amazing video thank you
@gconomics37669 ай бұрын
Glad you enjoyed it
@xxjadynx2 жыл бұрын
Jump scare at the end lmao
@PutraPratama-pr8sn Жыл бұрын
Muchas gracias por el video
@gconomics3766 Жыл бұрын
You are welcome!
@helenryan93775 жыл бұрын
A very clear explanation. However, I am a little confused. If a basket of goods is 8 Big Macs costing U$ 2 = U$ 16, in Japan would the PPP be $6 x 8 Big Macs = $48?
@sarasonsalas34725 жыл бұрын
Which basically means that when in the US the $16 gets you 8 Big macs...Now for you to get the same quantity (8) of Big macs in Japan @ $6 each you would need to have $48.
@prateekchs5 жыл бұрын
GDP@PPP is WITH RESPECT TO a particular country. It is just like fixing an axis so that one can compare economies. Here in this video, USA has been taken as reference hence GDP@PPP is calculated W.R.T. US(taking US cost for big mac). If you want to calculate same W.R.T. Japan then it would be $48 (8*$6) for US and $18 (3*$6) for Japan.
@devondevon43665 жыл бұрын
Actually the GDP at PPP for the US would be listed as 48 dollar for US and 18 dollars for Japan ( not 16 and 6 but somehow he reduces it to 16 and 6 ) since the ratio of 48: 18 is the same as 16: 6 since ( in this made up example) the cost of living is 3 times in Japan than in the US, so US GDP of 16 dollars (when compared to Japan ) became 48 dollars (16 multiply by 3), and Japan remained at 18 dollars ppp ( so Japan Gdp in ppp is the same as its nominal GdP of also 18 dollars)
@samanthataylor17613 жыл бұрын
Thank you sir. I'm new to economics and I'm trying to understand this term. So to calculate the purchasing power parity, we need to know to price of the product? Basically, I am struggling to understand this concept outside of your bigmac example -- which definitely helped me understand more. But my question remains. :) hope this makes sense.
@gconomics37663 жыл бұрын
This is a helpful article: www.economist.com/free-exchange/2012/06/08/return-of-the-mac
@samanthataylor17613 жыл бұрын
@@gconomics3766 thank you!
@thomasscott40812 жыл бұрын
great video
@gconomics37662 жыл бұрын
Thanks!
@iconictagizi79132 жыл бұрын
so kindly explain to me deeply, among USA and JAPAN, which one has the highest purchasing power regarding the above given exam? Thanks best regards
@radhamadhavstockselection79717 жыл бұрын
help full
@sanasajid47635 жыл бұрын
Thank you, sir!
@gconomics37665 жыл бұрын
Glad it was useful.
@schadrackndagijimana26557 жыл бұрын
i try to understand all those strategies of Purchasing power in parity
@indramal2 жыл бұрын
GDP by PPP high is good? When high, can we purchase more goods?
@petercn89892 жыл бұрын
In domestic higher PPP = better life.
@salvatore-zh3rd3 жыл бұрын
Beauty♡
@edrynazarif19963 жыл бұрын
best video about ppp
@gconomics37663 жыл бұрын
Glad it was useful
@sch4891 Жыл бұрын
great vid fun fact: China has the highest PPP in the world
@ollydix9 ай бұрын
It doesn't include property prices though?
@BargSlarg Жыл бұрын
So wouldn’t GDP PPP per capita be the most meaningful statistic?
@AHMD_a12 жыл бұрын
Imagine the UK has mostly external assets in euro and external liabilities in sterling. In case that sterling is depreciating against the euro. Explain what will happen to the net foreign asset position of the UK?
@Icecream-dv8oz4 жыл бұрын
for one second i though you were Berlin from casa de papel
@Mohamedxamza7 жыл бұрын
UNIT 3
@karan.k4 жыл бұрын
Why is the cost of goods different in different countries and if they are cheaper in one country but has a lower GDP, how does the country have a higher GDP?
@gconomics37664 жыл бұрын
The cost of a basket of goods will be different in most countries due to costs of production, inflation rates, taxation, exchange rates etc. In this instance, the lower GDP is reflecting the actual amount of goods and services that can be purchased assuming one dollar has equivalent purchasing power in both countries.
@gibbsm3 жыл бұрын
Either way, this only applies to regular people, rich people don't care, as it doesn't affect them much at all.
@jameslester89916 жыл бұрын
Why does the US PPP not reduce to $8?
@gconomics37666 жыл бұрын
James Lester if it reduced to $8, the US could only purchase 4 Big Macs rather than 8.
@mikehowlington40204 жыл бұрын
Hello ! I have a question , is the GDP written on the table the GDP per capita or is it the min wager in the specific country ? I'm really confused :(
@gconomics37664 жыл бұрын
It's a hypothetical value for the country's GDP - just to make the numbers easy to work with.
@mikehowlington40204 жыл бұрын
@@gconomics3766 Thank you for the reply ! I have to do a study for PPP and was thinking to compare the cost of living in different countries this way to find out like in the video if the currency is under appreciated or otherwise. Would it be relevant to use the minimum wager instead of the GDP because i want to refer to an individual instead of a country ?
@gconomics37664 жыл бұрын
@@mikehowlington4020 Have you looked at the Big Mac Index as published by The Economist magazine?
@mikehowlington40204 жыл бұрын
@@gconomics3766 I've looked on online versions of it , sadly i can't buy one where i live :(
@gconomics37664 жыл бұрын
@@mikehowlington4020 Register and you can read the article : www.economist.com/news/2020/01/15/the-big-mac-index
@dlx78442 ай бұрын
why does it imply that the yen is overpriced, if the GDP was also measured in dollars? wouldn't it mean that the GDP was overvalued in the same ratio? and the end result ratio doesn't care of the price of yen?
@nermeenaliabdelhakeem4223 жыл бұрын
Thanks
@gconomics37663 жыл бұрын
No problem
@AnActualMailman Жыл бұрын
What is in the basket of sales in this video?
@keenanpatel24626 жыл бұрын
Does that mean that the yen is overvalued
@gconomics37666 жыл бұрын
Keenan Patel yes, that is correct.
@yokakeshinowakane6 жыл бұрын
SO WHO HAS HIGHER PPP?
@devondevon43665 жыл бұрын
In his example, the US has the higher PPP (at 48 dollars, he reduces that 48 to 16 and reduce Japan 18 to 6) since cost of living is three times higher in Japan and the US nominal GDP was listed as 16 dollars. . Both countries would have the same PPP if the US nominal GDP was 6 dollars (since Japan is given as 18 and then US 6 dollars x 3 would give 18 dollars )
@voltaire666810 ай бұрын
Driving me insane when someone keeps "writing" with a marker that doesn't work. UGH
@Tofu34353 жыл бұрын
With ppp china already number one after 2013.
@AFTR20252 жыл бұрын
Nobody uses Ppp for that though
@tutacat11 ай бұрын
Except it's more subsidised in the USA.
@someswarroy8193 Жыл бұрын
Kindly take care of that lightning sound!
@liamhoward22085 жыл бұрын
Wtf? Lightning fright
@tphan5 жыл бұрын
I scared me also.
@Felix_Kirsch5 ай бұрын
Eventhough your explication of Purchasing Power was insightful, you did not elaborate on the fact that Purchasing Power Parity actually makes a prediction about what the exchange rate should be given the price levels in two countries. This is because differences in prices across countries should be reflected in the relative price of the currencies which are the exchange rates. If this does not hold there is an arbitrage possibility given that e.g. external Purchasing Power is higher than internal Purchasing Power.
@publisherucunionmoneyblog92916 жыл бұрын
Iam confused with my country.. Gdp ppp of my country is 3 times than nominal GDP
@gconomics37666 жыл бұрын
Please clarify your question.
@publisherucunionmoneyblog92916 жыл бұрын
G Conomics. My country have 4000 USD Per Capita Nominal GDP. And 13000 USD GDP PPP. Why?
@gconomics37666 жыл бұрын
It will be a consequence of the purchasing power of the USD in your country - where do you live?
@publisherucunionmoneyblog92916 жыл бұрын
G Conomics. I live in indonesia... And i wanna ask you more... What is the real GDP per capita of my country?? I see many people rich in here.. But with many poor people too.. Inequality is quite high.. Because our geography is Archipelago.. Its make it harder to share the wealth across the country
@adamsterdam9049 Жыл бұрын
That outro lmao
@mobrown75945 жыл бұрын
How is the Big Mac a thing you can get every where lol try a tomato or like a fish
@piotrmaj12334 жыл бұрын
I suppose it can differ depending on the local conditions, while BigMac is the same product from equally same amount of resources
@egwinharianto28513 жыл бұрын
the bigMac is not the same in every country
@Kingkongmental24 күн бұрын
Why is bro flipping me off
@sureshkumar-qw9ny Жыл бұрын
Wait what!?!?. A big mac?. Should raw materials that is available in every corner of the world like gold, silver and bronze or iron be a standard for such a calculation?.
@stephenwilliams6810Ай бұрын
The problem is that you would need to track the demand for these things. Gold and silver are largely speculative in value. There isn’t any real value in precious metals. I’m assuming it’s just easier with something that isn’t used for speculation and changes in price seldomly. But idk for sure this is just a guess
@sureshkumar-qw9nyАй бұрын
@@stephenwilliams6810 I think you got it in reverse. But first price of everything is speculative mate!. what decides how much profit is shared between CEO pockets and that of regular workers?. Price of goods and service sold in one place to next changes based on the availability of raw materials and infrastructure for it's production or service provided and to some extend local taxes. On the other hand precious metals especially gold and silver though changes in value each year depending on the amount that is in circulation and in reserves, it's value stays relatively same between each region and under each gvt. Considering we are running out of gold to mine and how it cannot be completely destroyed unlike a burger it's safe to say that these precious metals are very much a standards to measure the wealth of something or someone throughout the world still.
@pearcejack277 жыл бұрын
meh
@burropoco Жыл бұрын
Good video. Wished I'd not watched at 0400hrs with Sony headphones though 05:39 😂