January 6, 2000 (The Editor’s Desk is updated each business day.)
Where the dollar stretches most, least
In a recent study of prices in 32 nations, the
most expensive country was Switzerland and the least expensive was the
Slovak Republic.
![Price level indexes, selected countries, 1996](https://webarchive.library.unt.edu/web/20120925070709im_/http://www.bls.gov/opub/ted/images/2000/jan/wk1/art04.gif)
[Chart data—TXT]
For this analysis, price level indexes were constructed that can be
used to interpret whether a country’s average prices are high or low,
relative to a base country or country grouping. On a scale where the price
level index of the Organisation for Economic Co-operation and Development
(OECD)
equals 100, Switzerland had a price level index of 151 in 1996 and the
Slovak Republic had an index of 36.
In general, price levels were highest in Japan and northern Europe. The
United States had a price level index of 91, slightly below that of the
OECD as a whole.
The currencies of lower income nations were generally undervalued
relative to the American dollar. An American dollar converted at market
exchange rates has greater purchasing power in lower income countries,
such as the former Communist countries or Turkey or Mexico, than in the
United States.
This analysis of "purchasing power parities" was published in
the October 1999 issue of Monthly Labor Review. Purchasing power
parities are estimates derived from the relative price levels in different
countries and reflect the rate at which currencies can be converted to
purchase equivalent goods and services. For additional information see
"International
comparisons based on purchasing power parity,"
by Michelle A. Vachris and James Thomas, Monthly Labor Review,
October 1999. The OECD presently is made up of 29 countries, including the
U.S., Canada, Japan, and the countries of the European Union.
Of interest
Spotlight on Statistics: National Hispanic Heritage Month
In this Spotlight, we take a look at the Hispanic labor force—including labor force participation, employment and unemployment, educational attainment, geographic location, country of birth, earnings, consumer expenditures, time use, workplace injuries, and employment projections.
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