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 🤣
@nusaibahibraheem8183 Жыл бұрын
I thought tbe lighting will change at the end
@Mycatsbirthdayparty8 ай бұрын
As an American, Nominal GDP is grade A copetanyl from the west. Purchasing Power Parity is more of a true measure.
@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.
@kurniawan57232 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
@a.rahmanalthawadi74113 ай бұрын
I hope u dont think that mcdonalds meals are the driver of ppp value
@krisjankorf37546 жыл бұрын
RIP headphone users @ 5:39
@gconomics37666 жыл бұрын
Haha, apologies!
@youngterk21016 жыл бұрын
RIP myself haha
@travelwell80985 жыл бұрын
haha!
@maurolevy51474 жыл бұрын
I was warned... And I still jumped, lol
@r0hith19993 жыл бұрын
Thanks for the heads up😂😂
@shahjahanahmad30292 жыл бұрын
Well done mate. You've helped this first-year BSc econ student. Thank you
@brunxs2087 жыл бұрын
Got a jumpscare at 5:30 lol :0
@brunxs2087 жыл бұрын
I mean 5:40 xD
@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!
@matigon550 Жыл бұрын
Finally, I have understood what PPP means. Thanks for the simple and consice explanation.
@gconomics3766 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
@Rachl128411 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 :)
@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!
@aloysiusgregoryАй бұрын
Thank you for explaining the concept in a succinct manner.
@amalibaisaac9394 Жыл бұрын
I have watched longer videos yet struggled to make sense of them. But this is very precise and simple to understand.
@Snowmanver24 жыл бұрын
Thank you, very helpful. That lightning was a bit hair-raising though....
@abdallahferhi59527 ай бұрын
Accounting is the systematic process of recording, analyzing, summarizing, and reporting financial transactions of a business or organization. It plays a fundamental role in managing the financial affairs of a company, providing essential information for decision-making, financial planning, and performance evaluation..
@lokaman3546 жыл бұрын
really you are so great , best simple explanation, thanks alot
@bushrayasmeeneverydayvlogs27933 жыл бұрын
Best explanation and the way you explain sir is Amazing.. Thanks
@gconomics37663 жыл бұрын
Thanks and welcome
@evocative48566 жыл бұрын
Best explanation on youtube, thank you.
@tendayimasawi5931 Жыл бұрын
Simple illustration 👌
@abdallahferhi59527 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
@nealsawyers67233 жыл бұрын
Quality of content: 10/10 Quality of marker: 2/10 Great video, thanks for the straight forward explanation.
@dewiastari33815 жыл бұрын
good explanation , now im understand about gdp ppp :)
@albertuserwinsusanto9243 жыл бұрын
Awesome! Clear and concise! 棒棒哒!简洁易懂!
@gconomics37663 жыл бұрын
Glad it was useful.
@SuccessMindset2180Ай бұрын
1. Purchasing power connects with economy and inflation 2. GDP and GDP per capita are very useful metrics 3. Inflation and cost of living are also important metrics
@prakharshrivastava4691 Жыл бұрын
Dude that outro scared the hell out of me!! Thanks for the video though..
@barsbayar42524 жыл бұрын
Perfect explanation, thanks
@gconomics37664 жыл бұрын
Glad it was helpful!
@cbaide1007 жыл бұрын
Very good explanation, thank you very much!
@basketballjones11602 жыл бұрын
Finally, I can comprehend it. Thanks bro.
@gconomics37662 жыл бұрын
You're welcome
@alexandragopro39682 жыл бұрын
Excellent explanatio
@gconomics37662 жыл бұрын
Glad it was useful
@Linck192 Жыл 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?
@burropoco Жыл бұрын
Good video. Wished I'd not watched at 0400hrs with Sony headphones though 05:39 😂
@achusvlogs79222 жыл бұрын
Good explanation and thx dude
@gconomics37662 жыл бұрын
No problem 👍
@xxjadynx3 жыл бұрын
Jump scare at the end lmao
@ojasvi-gm2ff Жыл 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
@helenryan93776 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?
@sarasonsalas34726 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.
@prateekchs6 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)
@happyjoy98774 жыл бұрын
Nice explanation!!!
@gconomics37664 жыл бұрын
Glad it was useful
@BargSlarg Жыл бұрын
So wouldn’t GDP PPP per capita be the most meaningful statistic?
@BUNNY-ek4ru Жыл бұрын
Thanks from Belgium!
@gconomics3766 Жыл бұрын
Welcome!
@JuliusWise Жыл бұрын
Amazing video thank you
@gconomics3766 Жыл бұрын
Glad you enjoyed it
@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?
@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?
@ROTHSTEIN014 жыл бұрын
Feeling like a Goldman Sachs partner
@chetanchavan76003 ай бұрын
superb content and delivery. at the same time the starting and ending sounds could be reconsidered.
@ye700610 ай бұрын
Can’t believe I’m watching this video right now, not even for school or anything
@maurolevy51474 жыл бұрын
Quick! Someone tell me where I can buy a $2 Big Mac!
@이여솔-u3j4 жыл бұрын
This lecture is so helpful!!
@gconomics37664 жыл бұрын
Glad it was helpful.
@drrajmmc4 жыл бұрын
So please tell us what are the basket of goods and services that are considered while calculating ppp of a country
@cherrycherie28415 жыл бұрын
So helpful! Thank you!
@l.a58742 жыл бұрын
Thank you, now i understand
@gibbsm4 жыл бұрын
Either way, this only applies to regular people, rich people don't care, as it doesn't affect them much at all.
@dediisafiahlaksana9 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.
@roshanbeadle24767 жыл бұрын
Very helpful, thank you.
@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!
@nikhilsmith90215 жыл бұрын
Outro still scares me Mr Clarke!
@sch48912 жыл бұрын
great vid fun fact: China has the highest PPP in the world
@esterelmgart86962 жыл бұрын
Great video! thanks
@MathCuriousity2 күн бұрын
What does gdp have to do with ppp? All other videos discuss exchange rates and ppp; not gdp!
@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.
@ollydix Жыл бұрын
It doesn't include property prices though?
@dlx78446 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?
@MathCuriousity2 күн бұрын
Yea I don’t get this guys explanation at all - all the other videos discuss exchange rates and ppp - he’s going on about gdp - what does the value of total goods and services have anything to do with exchange rates and ppp?
@MrVpassenheim6 жыл бұрын
That was beautiful!
@travelwell80985 жыл бұрын
Good explanation! Thx.
@gconomics37665 жыл бұрын
Thanks ... pleased it was helpful.
@PutraPratama-pr8sn Жыл бұрын
Muchas gracias por el video
@gconomics3766 Жыл бұрын
You are welcome!
@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
@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
@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.
@thomasscott40812 жыл бұрын
great video
@gconomics37662 жыл бұрын
Thanks!
@Anishu11112 Жыл бұрын
the ending almost gave me a heart attack
@alantorres32917 күн бұрын
that outro made my day
@MrClayElf7 жыл бұрын
Very helpful!
@voltaire6668 Жыл бұрын
Driving me insane when someone keeps "writing" with a marker that doesn't work. UGH
@Felix_Kirsch10 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.
@とふこ4 жыл бұрын
With ppp china already number one after 2013.
@AFTR20252 жыл бұрын
Nobody uses Ppp for that though
@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.
@tutacat Жыл бұрын
Except it's more subsidised in the USA.
@keenanpatel24627 жыл бұрын
Does that mean that the yen is overvalued
@gconomics37667 жыл бұрын
Keenan Patel yes, that is correct.
@edrynazarif19963 жыл бұрын
best video about ppp
@gconomics37663 жыл бұрын
Glad it was useful
@yokakeshinowakane7 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 )
@AnActualMailman Жыл бұрын
What is in the basket of sales in this video?
@schadrackndagijimana26557 жыл бұрын
i try to understand all those strategies of Purchasing power in parity
@sanasajid47635 жыл бұрын
Thank you, sir!
@gconomics37665 жыл бұрын
Glad it was useful.
@Mr.MizuYuki24 күн бұрын
Thank you
@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
@nermeenaliabdelhakeem4224 жыл бұрын
Thanks
@gconomics37664 жыл бұрын
No problem
@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?.
@SilentAsianRoach5 ай 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-qw9ny5 ай бұрын
@@SilentAsianRoach 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.
@salvatore-zh3rd3 жыл бұрын
Beauty♡
@someswarroy81932 жыл бұрын
Kindly take care of that lightning sound!
@liamhoward22085 жыл бұрын
Wtf? Lightning fright
@tphan5 жыл бұрын
I scared me also.
@Icecream-dv8oz5 жыл бұрын
for one second i though you were Berlin from casa de papel
@Mohamedxamza7 жыл бұрын
UNIT 3
@adamsterdam90492 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