Atlas_method

Atlas method

Atlas method

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The Atlas method, employed by the World Bank since 1993, is utilized to estimate the economic size of nations in terms of their gross national income (GNI) in U.S. dollars.

To convert a country's GNI from its local currency into U.S. dollars, the Atlas conversion factor is employed. This factor incorporates a three-year average of exchange rates to mitigate the impact of temporary fluctuations in exchange rates. Additionally, it adjusts for the variance in inflation rates between the country in question (using its GDP deflator) and several developed nations (employing a weighted average of their GDP deflators in SDR terms). The resulting GNI in U.S. dollars is then divided by the country's midyear population to determine the GNI per capita.[1]

The World Bank favors the Atlas method as a means of comparing the relative economic sizes of countries. It is utilized to classify nations into low, middle, and high-income categories, as well as to establish eligibility for lending purposes. By employing this method, the World Bank aims to minimize abrupt changes in country classification caused by short-term fluctuations.

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See also

References

  1. [1]
    The Atlas Method Archived 2016-03-03 at the Wayback Machine, World Bank.
  2. [2]
    "GNI, Atlas method (current US$)". World Bank.
  3. [3]
    "GNI (current US$)". World Bank.
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