The Penn effect is the economic finding associated with what became the Penn World Table that real income ratios between high and low income countries are systematically exaggerated by gross domestic product (GDP) conversion at market exchange rates. It has been a consistent econometric result for at least fifty years.
The "Balassa-Samuelson effect" is a model cited as the principal cause of the Penn effect by neo-classical economics, as well as being a synonym of "Penn effect".
Read more about Penn Effect: History, Understanding The Penn Effect, The International Development Implications
Famous quotes containing the words penn and/or effect:
“the pomp
Of pain swells like the Indies, or a plum”
—Robert Penn Warren (1905–1989)
“Art should exhilarate, and throw down the walls of circumstance on every side, awakening in the beholder the same sense of universal relation and power which the work evinced in the artist, and its highest effect is to make new artists.”
—Ralph Waldo Emerson (1803–1882)