Average living standards in China are still only a sixth and in India a fourteenth of those in America at PPP exchange rates, but the gap is already much smaller than it was and is closing fast.

ECONOMIST: A game of catch-up

The gap between the official exchange rate and the rate in the swap market has widened to nearly 20%.

ECONOMIST: Rootling around for cash

But consumer prices often remain tame, because rising exchange rates and imports fill the gap between expanding domestic demand and supply.

ECONOMIST: Emerging markets

It also managed to narrow the gap between the official exchange rate and the price of the dollar in the free market.

ECONOMIST: Venezuela's economy

Since it takes time for exchange-rate changes to affect trade, the gap is likely to widen further: the full impact of the dollar's rise over the past two years has yet to be felt.

ECONOMIST: Not this again, please

With hyperinflation, a gap of around 10:1 has opened up between the official exchange rate operated by the bank and the true rate reflected in the black market.

ECONOMIST: How to prop up the government