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Exchange Rates
S/E/269. Purchasing power parity works in the long run but not in the medium or short run. Discuss
- WORDS:
- 2000
- DATE:
- 2011
- PRICE:
- 29.99 GBP
The paper examines the concept of purchasing power parity (PPP) explaining the PPP equation and considering whether PPP may not work in practice because real exchange rates tend toward PPP only in the long run while the speed of convergence to PPP is extremely slow.
KEYWORDS: purchasing power parity, PPP, real exchange rates,
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