Atlas Method
Encyclopedia
The Atlas Method is a method used by the World Bank
to estimate the size of economies in terms of gross national income
(GNI) in U.S. dollars.
The country's GNI in national currency is converted into U.S. dollars using the Atlas conversion factor, which uses a three-year average of exchange rate
s to smooth effects of transitory exchange rate fluctuations, adjusted for the difference between the rate of inflation
in the country (using the country's GDP deflator
), and that in a number of developed countries
(using a weighted average of the countries' GDP deflators in SDR
terms).
The World Bank
favors the Atlas Method for comparing the relative size of economies and uses it to classify countries in low, middle and high-income categories and to set lending eligibilities in order to reduce short-term fluctuations in country classification.
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
to estimate the size of economies in terms of gross national income
Gross National Income
The GNI consists of: the personal consumption expenditures, the gross private investment, the government consumption expenditures, the net income from assets abroad , and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the...
(GNI) in U.S. dollars.
The country's GNI in national currency is converted into U.S. dollars using the Atlas conversion factor, which uses a three-year average of exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...
s to smooth effects of transitory exchange rate fluctuations, adjusted for the difference between the rate of inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
in the country (using the country's GDP deflator
GDP deflator
In economics, the GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy...
), and that in a number of developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
(using a weighted average of the countries' GDP deflators in SDR
Special Drawing Rights
Special Drawing Rights are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund . Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged...
terms).
The World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
favors the Atlas Method for comparing the relative size of economies and uses it to classify countries in low, middle and high-income categories and to set lending eligibilities in order to reduce short-term fluctuations in country classification.