I have always been slightly puzzled how a small country, such as the Netherlands, can have a formal economy on the same order of magnitude as that of a large country, such as India. My confusion has finally been cleared up by an article in The Economist about their famous Big Mac Index. In essence, this index estimates Purchasing Power Parity (PPP), rather than the more common Gross Domestic Product (GDP). The index compares local prices of Big Mac hamburgers around the world, converting prices into US dollars at current exchange rates. As the article notes:
Small wonder, then, that global economic rankings are dramatically transformed when they are done on a PPP basis rather than market exchange rates. America remains number one, but China leaps from seventh place to second, accounting for 13% of world output. India jumps into fourth place ahead of Germany, and both Brazil and Russia are bigger than Canada.
Although I may choose not to be super-sized, there is much to admire in this Big Mac Index.
