Purchasing Parity Essay

Submitted By uragl001
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A. Definition: Purchasing power parity compares two currencies in different countries based on the price of similar goods. When the purchasing power is the same in both countries, the currency is in equilibrium. This means that the price of a good should be constant from one place to another if denominated in the same currency. (McBride)

B. Summary: Singapore has been named the wealthiest nation in the world by GDP per capita. Its GDP per capita ranked at $56,532 US, measured by purchasing power parity. Outdoing Norway, the US and Hong Kong, Singapore is the most affluent country and will hold the spot for year 2050. Singapore holds an astounding amount of millionaires and contains Louis Vuitton boutiques, luxury nightclubs and multi million dollar properties to go along with them. According to this article, the majority of the wealthy in Singapore hold US $100 million in disposable assets and are not worried about being affected by the worlds economy and political situations. But, with all of this wealth, the wealthiest individuals ranked Singapore fifth in the country when it comes to quality of life. Cities such as London and New York ranked higher when it comes to things that really matter such as knowledge and influence, economic activity, and political power. “The Knight Frank and Citi wealth report notes that “many of those fast-growing Chinese cities, performed significantly less well for freedom of expression and human rights something that may hinder any future ascent to the top of the overall ranking (Mahtani, 2012).” The wealthy that live in Singapore are mainly worried about the impact the global financial crisis will have on their wealth.

C. Discussion: The above article relates to my topic because it discusses how the wealth in Singapore compares to the quality of life in other cities. While Singapore has been named the wealthiest in the nation, it was ranked fifth in the nation when it came to things that really mattered such as quality of life and political power. This is a situation of win/lose. The US was also one of the highest GDP’s per capita at $45,511 (Mahtani, 2012). While Singapore consists of luxury properties and top dollar boutiques, New York City does too. The difference between the two is that even though Singapore has economic growth, New York consists of a better political system and a better quality of life and the wealthy would rather have this over economic growth. I think most wealthy would choose this option over the other. Yes, having riches and the finer things of life are nice, but sometimes I think people forget what really matters. Making sure we have a good political system to make sure that our finances are secure is important. Also, making sure we have knowledge and the ability to change things if needed is also important. Being wealthy is no good if you can’t enjoy other privileges; I know what I would choose.

D. Citation:
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