r. A nation's GDP at offical exchange rates
(OER) is the home-currency-denominated annual GDP figure divided by the
bilateral average US exchange rate with that country in that year. The
measure is simple to compute and gives a precise measure of the value
of output. Many economists prefer this measure when gauging the
economic power an economy maintains vis-a-vis its neighbors, judging
that an exchange rate captures the purchasing power a nation enjoys in
the international marketplace. Official exchange rates, however, can be
artifically fixed and/or subject to manipulation - resulting in claims
of the country having an under- or over-valued currency - and are not
necessarily the equivalent of a market-determined exchange rate.
Moreover, even if the official exchange rate is market-determined,
market exchange rates are frequently established by a relatively small
set of goods and services (the ones the country trades) and may not
capture the value of the larger set of goods the country produces.
Furthermore, OER-converted GDP is not well suited to comparing domestic
GDP over time, since appreciation/depreciation from one year to the
next will make the OER GDP value rise/fall regardless of whether home-
currency-denominated GDP changed.

GDP (purchasing power parity): This entry gives the gross domestic
product (GDP) or value of all final goods and services produced within
a nation in a given year. A nation's GDP at purchasing power parity
(PPP) exchange rates is the sum value of all goods and services
produced in the country valued at prices prevailing in the United
States. This is the measure most economists prefer when looking at per-
capita welfare and when comparing living conditions or use of resources
across countries. The measure is difficult to compute, as a US dollar
value has to be assigned to all goods and services in the country
regardless of whether these goods and services have a direct equivalent
in the United States (for example, the value of an ox-cart or non-US
military equipment); as a result, PPP estimates for some countries are
based on a small and sometimes different set of goods and services. In
addition, many countries do not formally participate in the World
Bank's PPP project that calculates these measures, so the resulting GDP
estimates for these countries may lack precision. For many developing
countries, PPP-based GDP measures are multiples of the official
exchange rate (OER) measure. The