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Other Papers on :Price Stability, Inflation and Central Banks

C/E/132. Purchasing Power Parity shows that exchange rates are determined purely by relative prices. No other factors are important in explaining exchange rate movements. Discuss

(2006, 3500 words)

The following research provides an overview of the theoretical underpinnings of the Purchasing Power Parity model. It presents a detailed walk-through the main conclusions and implication of Purchasing Power Parity theory and thoroughly discusses the result of the empirical application of the model. The special focus is given to discussion of the link between changes in the price level and exchange rate.



 
   
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