What he's talking about is a structural phenomenon related to automation - far fewer jobs are created in India (and elsewhere) per unit of GDP growth:
https://www.theatlas.com/charts/S1LH9K_t7
Those charts also show a remarkable slowdown in India's economy from 2004 - which never at its peak reached Chinese double-digit growth rates.
Now tell me if you know how the job numbers were even reported in the earlier era (around 2000 - 2004) in India compared to how it is now (and how it is progressing to)? You do not even know what the bulk of these jobs in the earlier era were from (huge amounts were from transient agriculture work that is rightfully not counted as quality job creation now)....so the whole rigmarole that "fewer jobs" created now per unit of GDP is a bunch of BS....given the standards being compared are nowhere near equivalent, much less static. You need to actually study what jobs surveying in India is like....its not standardised by any stretch, its on a long journey itself to being measured properly.....yet we want to come to conclusions like its totally hard, consistent data process.
The problem here is that country B is too technologically backward to produce certain classes of product at any price. While PPP might be good for comparing local prices for basic agricultural products, it's not good for comparing local prices of semiconductors since country B can't produce them.
Thats factored into ICP matrix. If a country produces 0, it produces 0 in that category...period. There is no "issue" here. Every category of good and service is delineated internally as to the quality/pricing on larger international standard terms (I could tell you more about how that exactly is sampled, but I don't want to bore you). ICP is far more balanced on this topic...it goes by what people on the ground are actually consuming....not what artefacts of trade extrapolation linger in nominal measure of using a currency measurement their country does not even print/use (internally) in first place.
If that said category of good (that registers as 0) is simply 0.01% or some fraction like that of the average country's total consumption to begin with, why would one say nominal somehow represents it better?...if anything its worse simply because its distorted by exporting it and forex liquidity causing a non-consumed buffer/effectve inflator.
People consume food, construction, basic services which much larger sustained parts of their income compared to high end frontier goods to begin with....always have, always will....esp in developing economies.
The ICP process certainly does not do the degree of faulty extrapolation/assumption that nominal does
inherently (i.e the assumption that a developing/emerging country consumes internally by the same composition structure of goods/services that it trades externally...which is what you end up doing when you apply an exchange rate determined by foreign trade to your whole internal economy production/consumption)....by any stretch of the imagination (if you even read up why PPP and ICP programs were formulated in first place in the 80s due to massive and growing mismatches of consumption locally compared to USD wise in many major developing countries).
There are far more faulty problems with using nominal as some be-all end-all for developing countries ...given these distortions (they diminish only when you have qualitatively integrated with most of the world economy...not just quantitatively). Hence why developed countries PPP and nominal are not too different.
...must be the worst ratio in existence in this forum by far.
