Chapter 30: Purchasing Power Parity

International Finance Theory & Policy
by Steven M. Suranovic

Chapter 30
Purchasing Power Parity

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Table of Contents

30-1 Introduction to Purchasing Power Parity (PPP)

30-2 The Consumer Price Index (CPI) and PPP

30-3 PPP as a Theory of Exchange Rate Determination

30-4 Problems and Extensions of PPP

DOWNLOAD Chapter 30 in PDF format.

Problem Sets

Answer Keys

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Related Links

Purchasing Power Parity Info Site
OECD site containing statistics and the latest research, reports and papers relating to PPPs.

PPP FAQ
an excellent summary from the OECD. A MUST READ!

Comparative Price Levels for OECD countries -December 2003
these numbers are the same as the real exchange rates.

PPPs for OECD Countries since 1970
compare these with the exchange rates in each year to determine if exchange rates were overvalued or undervalued with respect to PPP

CPI FAQ
an excellent summary from the US BLS describing the derivation and use of the Consumer Price index
Video: Economist's Big Mac Index
this video clip explains PPP by comparing Big Mac prices around the world.
Lattenomics from the Economist
a new theory percolating through FOREX markets.
National GDP Comparisons
scroll down the page to see 2003 GDP comparisons using PPP exchange rates.

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HOW TO CITE THIS PAGE
Suranovic, Steven, "International Finance Theory and Policy: Purchasing Power Parity," The International Economics Study Center, © 1997-2006, http://internationalecon.com/v1.0/Finance/ch30/ch30.html.