<p>They use 1944 dollars to adjust for inflation. This just means they adjust all dollar values in such a way that price level from 1944 is held constant.</p>
<p>Any currency can be calculated in terms of 1944 dollars even if the currency is brand new.</p>
<p>First, you can convert any present year (2023) currency into 2023 dollar. Then convert 2023 dollar into 1944 using deflator or some other method that adjusts for changing purchasing power.  This will express whatever value in whatever currency in 1944 dollars even if the currency did not existed in 1944 like Euro for example.</p>

CC BY-SA 4.0
2023-06-15T21:57:25.087Z
How is a "deflator or some other method that adjusts for changing purchasing power" calculated for a country that didn't exist in 1944?
M. Y. Zuo
CC BY-SA 4.0
2023-06-16T11:31:47.657Z
@M.Y.Zuo deflator is calculated only for US you don't need it for the country, as mentioned in my answer, step 1. convert the money of any country to USD, step 2. apply deflator to USD, that will correct for inflation regardless whether the original country existed in 1944 or not because you are dealing with constant dollars
1muflon1
CC BY-SA 4.0
2023-06-17T19:55:27.320Z
What is the 1944 value supposed to measure in this case?
M. Y. Zuo
CC BY-SA 4.0
2023-06-17T22:00:29.960Z
@M.Y.Zuo value of dollar in 1944. I don't know if you are aware of it but value of money changes over time. This causes problems in measurement over time as this would be an equivalent of lets say length of meter changing every year in physics. To solve this problem people pick some arbitrary year (the year does not really matter) and then recalculate all other years in a way to make the value of 1 dollar same everywhere across the time (continuing with previous analogy you could fix the changing length of meter issue by recalculating all measurement using the measure from a particular year)
1muflon1
CC BY-SA 4.0
2023-06-19T13:41:47.743Z
I didn't mean in the general case, what's it supposed to measure in the specific case of this IBRD document with the 1944 dollar values next to each country? Just calculating from the current exchange rate backwards to 1944 does not measure the actual difference as it existed in 1944 because many countries have had sharp discontinuities, such as pegging, change in currencies, etc...
M. Y. Zuo
CC BY-SA 4.0
2023-06-19T19:51:35.580Z
@M.Y.Zuo it does measure it because the conversion to USD is done today and then the inflation adjustment is done
1muflon1
CC BY-SA 4.0
2023-06-20T21:08:35.420Z
Did you miss the second half of my comment? Many countries have had sharp discontinuities in their exchange rate at various points in time due to a large number of reasons. The actual purchasing power differences in 1944 would not match up with this naive calculation.
M. Y. Zuo
CC BY-SA 4.0
2023-06-21T01:07:14.680Z
@M.Y.Zuo did you miss my last comment? It does not matter because the conversion is done today not in past. What the past exchange rate was before the report was published is immaterial. They are calculating it for 2021 so past exchange rate does not matter and I don't even understand why you think it should matter. Also the report does not mention exchange rate so perhaps they used PPP or something else, in any case any past discontinuities in exchange rate are completely irrelevant for this. The 1944 dollars are used to account for inflation, and any arbitrary year xxxx dollar could be used
1muflon1
CC BY-SA 4.0
2023-06-14T19:20:22.000Z
2023-06-14T19:20:22.000Z
1muflon1
<p>Several official documents published by the World Bank's 'International Bank For Reconstruction and Development' (IBRD), such as <a href="https://pubdocs.worldbank.org/en/795101541106471736/IBRDCountryVotingTable.pdf" rel="nofollow noreferrer">https://pubdocs.worldbank.org/en/795101541106471736/IBRDCountryVotingTable.pdf</a></p>
<p>feature tables of all the subscriptions listed by country. Noticeably, the dollar amounts are measured in '1944 US dollars'.</p>
<p>Considering some of the listed countries didn't even exist in 1944, or had convertible currencies, it seems rather difficult to understand how this amount is calculated or why it's still being used.</p>
<p>I've not been able to find any literature online that would explain the rationale, so any insight anyone may have would be appreciated.</p>

<banking><central-banking><international-economics><development-economics><economic-history>
Why are subscriptions to the World Bank's IBRD measured in 1944 US dollars? How is this calculated?
M. Y. Zuo
# Why are subscriptions to the World Bank's IBRD measured in 1944 US dollars? How is this calculated?

(Asked by: username_0 on 2023-06-14)

Several official documents published by the World Bank's 'International Bank For Reconstruction and Development' (IBRD), such as <https://pubdocs.worldbank.org/en/795101541106471736/IBRDCountryVotingTable.pdf>

feature tables of all the subscriptions listed by country. Noticeably, the dollar amounts are measured in '1944 US dollars'.

Considering some of the listed countries didn't even exist in 1944, or had convertible currencies, it seems rather difficult to understand how this amount is calculated or why it's still being used.

I've not been able to find any literature online that would explain the rationale, so any insight anyone may have would be appreciated.

**Tags:** banking, central-banking, international-economics, development-economics, economic-history

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## 1 answers

### Answer by username_1 on 2023-06-14. Score: 1

They use 1944 dollars to adjust for inflation. This just means they adjust all dollar values in such a way that price level from 1944 is held constant.

Any currency can be calculated in terms of 1944 dollars even if the currency is brand new.

First, you can convert any present year (2023) currency into 2023 dollar. Then convert 2023 dollar into 1944 using deflator or some other method that adjusts for changing purchasing power. This will express whatever value in whatever currency in 1944 dollars even if the currency did not existed in 1944 like Euro for example.

> **Comments:**
> **username_0**: How is a "deflator or some other method that adjusts for changing purchasing power" calculated for a country that didn't exist in 1944?  
> **username_1**: @M.Y.Zuo deflator is calculated only for US you don't need it for the country, as mentioned in my answer, step 1. convert the money of any country to USD, step 2. apply deflator to USD, that will correct for inflation regardless whether the original country existed in 1944 or not because you are dealing with constant dollars  
> **username_0**: What is the 1944 value supposed to measure in this case?  
> **username_1**: @M.Y.Zuo value of dollar in 1944. I don't know if you are aware of it but value of money changes over time. This causes problems in measurement over time as this would be an equivalent of lets say length of meter changing every year in physics. To solve this problem people pick some arbitrary year (the year does not really matter) and then recalculate all other years in a way to make the value of 1 dollar same everywhere across the time (continuing with previous analogy you could fix the changing length of meter issue by recalculating all measurement using the measure from a particular year)  
> **username_0**: I didn't mean in the general case, what's it supposed to measure in the specific case of this IBRD document with the 1944 dollar values next to each country? Just calculating from the current exchange rate backwards to 1944 does not measure the actual difference as it existed in 1944 because many countries have had sharp discontinuities, such as pegging, change in currencies, etc...  
> **username_1**: @M.Y.Zuo it does measure it because the conversion to USD is done today and then the inflation adjustment is done  
> **username_0**: Did you miss the second half of my comment? Many countries have had sharp discontinuities in their exchange rate at various points in time due to a large number of reasons. The actual purchasing power differences in 1944 would not match up with this naive calculation.  
> **username_1**: @M.Y.Zuo did you miss my last comment? It does not matter because the conversion is done today not in past. What the past exchange rate was before the report was published is immaterial. They are calculating it for 2021 so past exchange rate does not matter and I don't even understand why you think it should matter. Also the report does not mention exchange rate so perhaps they used PPP or something else, in any case any past discontinuities in exchange rate are completely irrelevant for this. The 1944 dollars are used to account for inflation, and any arbitrary year xxxx dollar could be used  

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