LEADERS of the Group of 7, currently summiteering in...

Salmagundi

July 08, 1993

LEADERS of the Group of 7, currently summiteering in Tokyo, are often described as heading "the world's seven wealthiest nations."

Well, that all depends on how you're counting.

Traditionally, economies were compared by using exchange rates to convert their output into dollars. Doing things that way, the G-7 members are the top seven in gross domestic product; in order: United States, Japan, Germany, France, Italy, Britain and Canada. (Canada, by the way, barely edges out Spain).

But the International Monetary Fund recently completed a study which ranks nations' economies in a new way. The new system, popular with academic economists, ranks countries by "purchasing power parity" -- what a country's currency will buy in goods and services. It makes developing nations, where prices for many things are low, appear richer.

The collapse of the Soviet Union has meant that the IMF does not have up-to-date figures for Russia and other former Soviet republics, so they were not included in the rankings.

That aside, the new method produces an interestingly altered list. "The world's seven wealthiest nations" would be, in order: United States, Japan, China, Germany, France, India and Italy.

Quite a different Group of Seven. Britain barely misses out, while Canada falls to 11th place, behind Brazil and Mexico.

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