1/ The India-vs.-Bangladesh GDP per capita comparison (post @IMFNews WEO) has sparked anxiety & acrimony

But wrong numbers being compared

NO, on more appropriate metric, India has not been surpassed and, according to IMF, unlikely to be in near future

2/ GDP per capita is an *estimate* for one *indicator* of the average standard of living/welfare in a country

Note the 2 caveats, it is only one indicator, there are many others (eg. human development index)

and even as that indicator, GDP can be measured in many ways

3/ We need to measure "real" GDP in local currency after taking out effects of inflation and

Then, convert all local currency estimates of real GDP into comparable dollars

Many ways of doing this (IMF has 3, World Bank has 4)

4/ All the focus has been on comparisons based on GDP measured at current, market exchange rates

This yields "conclusion" of Bangladesh eclipsing India

But market exchange rates not appropriate for welfare comparisons across time & countries because

5/ they may not adequately reflect domestic inflation and/or productivity growth

More appropriate basis is GDP at constant, purchasing power parity (PPP) exchange rates

This shows India ahead &, despite COVID's more adverse impact in 2020, likely to remain so

6/ BUT important caveats

IMF's historical numbers are themselves based on countries' local currency GDP estimates which are subject to uncertainty for both India and Bangladesh: https://twitter.com/justinsandefur/status/1189225224673386497?lang=ca

And IMF forecasts can also be off: https://twitter.com/DaveEvansPhD/status/1317165193609269248

7/ And important policy lessons

India has no room for complacency

It was slowing pre-Covid: https://www.hks.harvard.edu/centers/cid/publications/faculty-working-papers/india-great-slowdown

And Covid impact severe: for example, India will return to pre-covid *LEVEL* of real per capita GDP only in 2022, 3 lost years

8/ Finally

Bangladesh's performance over last 2 decades-on growth, manufacturing exports, & range of social indicators such as fertility, female labour participation, fin'l inclusion-has been remarkable

Bangladesh is a miracle-in-the-making offering development lessons for all