Remember this debate about the relative living standards of Sweden and Alabama? One little commented result of the euro, krona and pound?s rise against the US dollar over the last two years is that measured in current exchange rates European countries? income per head now compares rather more favourably against the United States.
In 2004 the IMF expects US per capita GDP to be just under $39,000. Using current exchange rates, it forecasts French and Germany GDP per capita to be around $33,000, or about 85% of the US level. But the biggest change has been in Sweden, where the krona?s appreciation from nearly 11 to the dollar to just over 7 has brought its GDP per capita to around $39,000 too ? the same as the US ? and of course considerably higher than Alabama. (Figures from the IMF and own calculations).
Of course as hundreds of commenters are sure to point out you really need PPP exchange rates (excel file) as the flip-side of the stronger krona is that prices will be considerably higher in Sweden than in the US, thus market exchange rates, particularly at these high levels, don?t very accurately measure living standards. But then again neither does GDP per head, the point many made at the time of the Alabama comparision.