The international dollar, also called the Geary-Khamis dollar, is a hypothetical monetary unit that has the same purchasing power that the US dollar has in the United States at a given moment in time. This unit shows how much a unit of a local currency is worth within the borders of the country. Conversions to international dollars are calculated using the "purchasing power parity" (PPA). The PPA is the amount of local currency units that are needed to acquire, within the country in question, the same amount of goods that in the US would be bought with a US dollar. The goods must be equal or at least comparable.

The international dollar is used mainly to make comparisons between different countries as well as over time. For example, the comparison of the gross domestic product per capita of several countries made in international dollars, instead of simply based on exchange rates, provides a measure with more validity for comparing living standards.

The international dollar is calculated by the World Bank. He was born in the 1960s at the University of Pennsylvania as part of the "International Comparison Program", commissioned by the aforementioned World Bank (initially proposed by Roy C. Geary in 1958 and developed by Salem Hanna Khamis between 1970 and 1972). The objective was to estimate a per capita income that was internationally comparable. Due to fixed or only partially flexible exchange rates, in addition to international capital movements, it is not possible to use the exchange rates resulting from the foreign exchange market for these comparative purposes.

The calculation of the international dollar is complicated and the result can only be interpreted as an approximation of the true value. The figures expressed in international dollars can not be converted to the currency of another country using market exchange rates; instead, the figures must be converted using the exchange rates according to the PPA used in the study. Bibliography

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