The dichotomy between Purchasing Power Parities (PPPs) and national deflators in international comparisons of real variables (GDP per capita and productivity) has returned to center stage in the recent debate on the gap between the EU and the US. This dichotomy does not only concern comparisons between structurally different countries. It is also present, to a lesser but still significant extent, in Europe and with reference to the Italian economy. This paper shows how, over the period 2005-2023, Italy's productivity performance compared to Germany and France is better if GDP is measured in PPPs (output side) rather than deflated with implicit prices from national accounts. The two types of measurement lead to dynamics that are difficult to reconcile. Examining the PPP-deflator gap, it is clear that this difference does not depend on the composition and structure of the weights used in constructing PPPs. Analysis of the expenditure categories that make up GDP and analysis of the specific household consumption items reveal a pervasive phenomenon, affecting both tradable and non-tradable products. It is argued that the structural similarity of economies lends robustness to PPPs. It is concluded that comparisons between countries under consideration based on data deflated with implicit prices from national accounts are less reliable, even in time series, than those based on PPPs due to the heterogeneous approaches of statistical offices in accounting for the quality of goods and services, the different granularity of underlying information, and the fixed structure of relative prices across economies.

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