On International Comparison of National Income Within the CMEA Framework

Abstract

The article considers the results and methods of international comparisons of national income carried out in the CMEA from 1959 to1988. It is noted that the results of these comparisons were used for solving problems related to the organization of economic cooperation within the CMEA. This goal was consistent with the methodology of bilateral comparisons of the national income of the USSR with each other CMEA countries. The final results for each bilateral comparison were computed using the Fisher index formula. This procedure did not secure the transitivity of the results. Considerable attention was paid to selecting commodity representatives with prices for calculating purchasing power parities (PPPs). For this purpose, meetings of experts, who were well-versed in the technical characteristics of the selected commodity representatives, were convened: in some cases, commodity prices were adjusted to ensure their comparability. The biggest challenges emerged while securing price comparability for the following commodity representatives: machinery, equipment, and construction projects.

The paper presents characteristics of GDP based on PPP comparison methodology carried out within the UN ICP framework. It ensured the comparison of UN ICP and the CMEA comparison methods. In particular, it is noted that GDP comparisons were carried out using multilateral methods of comparison, securing the transitivity of the computed indices. In addition to national income indicators of industrial and agricultural output, capital investments and consumption of the population were compared. The article contains two tables with results of comparisons of national income of the CMEA countries, which were initially classified.