International dollar / Geary-Khamis dollar / Current international dollar
Encyclopedia of Business Terms and Methods, ISBN 978-1-929500-10-9. Copyright © 2011. Marty J.Schmidt.
The International dollar (also known as the Geary-Khamis dollar) is a currency unit used by economists and international organizations to compare the values of different currencies. International dollar comparisons between countries have been adjusted to reflect currency exchange rates, but also adjusted to reflect purchasing power parity (PPP) and average commodity prices within each country.
International dollars for a single year are typically presented as the current international dollar—reflecting the current year's exchange rates and current PPP adjustments. When figures are compared across years, they may also adjusted for inflation so as to represent currencies in constant (international) dollars for a base year, such as 2000.
The International dollar was first proposed by Roy. C. Geary, an Irish statistician in 1958. It was further developed and promoted in the 1970s by Salem Hanna Khamis, a Palestinian economic statistician. In the last few decades, various forms of the international dollar have become the metric of choice for organizations such as the International Monetary Fund (IMF) and World Bank, for comparing wealth and individual earnings between nations.
International dollar comparisons between countries will generally differ from comparisons based solely on currency exchange rates (so-called nominal, or exchange rate comparisons). Here, for example are World Bank 2009 figures for 25 country economies, showing per capita gross domestic product (GDP) expressed first in international dollars (3rd column) and then on the basis of exchange rate only comparisons (4th column).
| Approx Rank Intl $ Basis | Country | GDP Per Capita Intl $ Basis | GDP Per Capita Nominal Exch Rate |
|---|---|---|---|
| 1 | Luxembourg | 84,003 | 105,350 |
| 2 | United Arab Emirates | 57,827 | 45,615 |
| 3 | Norway | 55,672 | 79,089 |
| 4 | Singapore | 50,705 | 37,600 |
| 5 | United States | 46,436 | 46,436 |
| 6 | Ireland | 41,278 | 51,049 |
| 7 | Netherlands | 40,715 | 47,917 |
| 8 | Australia | 39,231 | 42,279 |
| 9 | Austria | 38,748 | 46,019 |
| 10 | Canada | 37,946 | 39,599 |
| 11 | Sweden | 37,905 | 43,654 |
| 12 | Iceland | 37,595 | 38,029 |
| 13 | Denmark | 36,762 | 55,992 |
| 14 | United Kingdom | 36,496 | 36,165 |
| 15 | Germany | 36,449 | 40,800 |
| 16 | Belgium | 36,048 | 43,430 |
| 17 | Finland | 34,650 | 44,491 |
| 18 | France | 33,655 | 41,600 |
| 19 | Spain | 32,545 | 31,774 |
| 20 | Japan | 32,443 | 39,727 |
| 21 | Italy | 31,909 | 36,400 |
| 22 | Equatorial Guinea | 31,825 | 15,397 |
| 23 | Greece | 29,663 | 29,240 |
| 24 | New Zealand | 28,723 | 29,000 |
| 25 | Israel | 27,674 | 26,175 |
These per capita figures, of course, represent total country GDPs divided by each country's average population. The 2009 international dollar figures show, for example, that the average citizen of Luxembourg was represented by slightly more than twice the economic output of the average Irish citizen (Intl $84,000 vs. $41,278). Figures in both GDP columns are thus adjusted to show "wealth" or economic output in the country, per individual.
Note however that taking PPP into account can make a difference in country rankings. When PPP is taken into account (with the international dollar), the United Arab Emirates, for instance, scores higher than Norway in per capita GDP. The reverse is true when the comparison is based on exchange rates only.
Note also that country rankings based on total GDP itself would be quite different: China's total 2009 GDP, for instance, is more than 95 times greater than Luxembourg's. On a per capita basis, however, China (one of the world's largest total GDPs) does not register even in the 25 highest ranking countries.
International dollar figures may be expressed as current international dollars (as in the table above), in which case the exchange rate adjustments and PPP adjustments represent the stated year's exchange rates and buying power figures for each country.
When comparisons are made between years, as well as countries, however, the International dollar figures may be further adjusted to compensate for inflation. In that case, a base year will be specified, e.g., 2000, and all figures between countries and between years, will be expressed in constant international "2000 international dollars," (or some constant dollars for some other base year.
In summary, those comparing economic figures from different countries and different times should be sure to understand carefully which adjustment or adjustments are reflected in the data:
- Population adjustments (In which case, figures represent per capita monies)
- Currency exchange rate adjustments (In which case, figures will be expressed in one currency unit (typically US$, International $, €, £or ¥)
- Purchasing power parity adjustments and/or average commodity prices (in which case, figures are typically expressed as International $)
- Inflation adjustments (in which case, figures have been adjusted, based on changes in an inflation index such as the consumer price index, to represent currency for a "base" year, such as 2000).
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