Assessing a rival’s strength by nominal GDP in dollars can wildly understate their war capacity because domestic costs determine how many tanks, shells, and drones money can buy. Purchasing power parity (PPP) better captures industrial throughput in wartime economies, especially under sanctions and autarky. Misusing dollar GDP led Europe to underestimate Russia’s staying power.
— Using PPP to gauge adversaries would change sanctions design, defense procurement benchmarks, and escalation risk assessments in Europe’s Russia policy.
Wolfgang Munchau
2025.10.05
78% relevant
The piece argues the West should assess the China–India bloc by purchasing power parity because dollar GDP is constrained by sanctions and capital controls—mirroring the idea that PPP better captures real capacity (what states can actually buy/build) than nominal GDP.
Wolfgang Munchau
2025.09.21
100% relevant
Wolfgang Munchau argues Europe misjudged Russia by treating its economy as 'Spain‑sized' in dollars instead of asking 'how many tanks their money can buy,' i.e., PPP capacity.
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