Europe has a productivity problem that comparisons based on purchasing power parity can’t capture
The US sold far more in 2024 than it did in 2000, but some of the larger number is due to inflation, not to higher output. To remove the impact of inflation, a country’s statisticians build a deflator: an index of how domestic prices have moved, year by year, so that higher prices are not mistaken for higher production. The deflator answers a different question from the Big Mac index. It asks how much more the US produced in real terms, after adjusting for price changes.
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