Title is self-explanatory.
It’s probably really simple, but for some reason I’ve never been able to understand it. Much thanks in advance!
In: 4
The other answer has it more or less correct, I’ll try to give a more streamlined version.
Nominal GDP per capita is the raw amount of money you make, PPP adjusted GDP per capita is the amount of you make taking into account the cost of living.
E.g. if you make $100k in San Francisco and your friend who lives in Des Moines also makes $100k, you’ll both have the same nominal GDP per capita, but he’ll be much better off than you on a PPP-adjusted calculation because his $100k will go further than yours.
This is why some Americans retire in relatively poor Asian countries, the same amount of USD will afford you a much nicer house and lifestyle in Vietnam or Thailand than Miami or Malibu.
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