Purchasing Power Parity – University of British Columbia

April 28, 2020

Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means that the exchange rate between two countries should equal the ratio of the two countries’ price level of a fixed basket of goods and services.

http://fx.sauder.ubc.ca/PPP.html

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