Purchasing Power Parity and Exchange Rates
The Economist defines purchasing-power parity theory as follows: Purchasing-power parity theory. A theory which states that the exchange rate between one currency and another is in equilibrium when their domestic purchasing powers at that rate of exchange are equivalent.
A discussion for beginners that examines what determines an exchange rate or the value of a currency. Why do currencies go up and down?
Relative PPP vs. Absolute PPP. Definitions and descriptions.
A reader's response to the article "The Trade Deficit and Exchange Rates"
A look at the purchasing power parity theory (PPP theory) and show what the theory implies. An important topic in monetary economics.