The Principle Practise And Problems Of Purchasing Power Parity Theory
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| Author | : Alina Ignatiuk |
| Publisher | : GRIN Verlag |
| Total Pages | : 33 |
| Release | : 2009-04-09 |
| Genre | : Business & Economics |
| ISBN | : 3640307550 |
Seminar paper from the year 2008 in the subject Business economics - Miscellaneous, grade: A, Schmalkalden University of Applied Sciences (Schmalkalden University), language: English, abstract: "Under the skin of any international economist lies a deep-seated belief in some variant of the PPP theory of the exchange rate." The purpose of this paper is to consider one of the most controversial theory in international economics – Purchasing Power Parity theory – its main idea, empirical evidence, limitations and practical application. The main idea of PPP is price levels changes determine the exchange rate change between two countries. There are two versions of PPP theory absolute and relative. Stricter absolute version of PPP did not find confirmation in reality and relative version of PPP theory was proposed. Despite theoretical and practical inconformity, PPP is present in many models of international economics as an explanation of exchange rate changes. The main apologist of PPP theory and its father was Gustav Cassel. He indicated that the exchange rate determined by price levels is not necessarily the actual exchange rate but the equilibrium one. Also Cassel mentioned that there is a tendency for the actual exchange rate to return to its equilibrium exchange rate. The original idea of PPP theory is described below: “Our willingness to pay a certain price for foreign money must ultimately and essentially be due to the fact that this money possesses a purchasing power as against commodities and services in that foreign country.” In this paper we considered the principle and two versions of PPP theory, discussed its empirical evidence and econometrical tests, and also tried to find possible reasons why PPP theory fails in reality and answered the question is this theory still useful for explaining exchange rates movements.
| Author | : Irving Fisher |
| Publisher | : |
| Total Pages | : 558 |
| Release | : 1911 |
| Genre | : Money |
| ISBN | : |
| Author | : |
| Publisher | : Freeload Press, Inc. |
| Total Pages | : 657 |
| Release | : |
| Genre | : |
| ISBN | : 1930789025 |
| Author | : Nicolas Barbaroux |
| Publisher | : Routledge |
| Total Pages | : 246 |
| Release | : 2013-08-21 |
| Genre | : Business & Economics |
| ISBN | : 1135067945 |
This new volume sheds new light on current monetary issues, in particular the debate on monetary policy making, by blending theoretical economic analysis, history of economics, and historical case studies. A discretionary monetary policy refers to cases in which the central bank is free to change its policy actions or key instruments when the need arises, whilst a monetary policy rule can be defined as a commitment from (independent) central banks to reach one or several objective(s) by way of systematic policy actions. This book uses case studies from France and Sweden, and places them in the context of Keynes’ argument from his 1923 ‘Tract on Monetary Reforms’, to support the argument that the use of discretionary practices within a monetary policy rule (such as in the Gold Standard era) is the best approach. This book takes an innovative approach in combining a theoretical analysis (mainly the work of New Neoclassical Synthesis throughout Woodford's model) a history of economic thought analysis (based on the monetary works from Wicksell, Cassel and Keynes) and an historical study of central bank practices both in France (based on Bank of France archives materials) and in Sweden. The final section of the book explores the debate on monetary policy rule in light of the 2008 financial crisis. As such, the book provides a unique synthesis that will be of interest not only to scholars of history of economic thought and economic theory, but also to anyone with an interest in monetary economics and contemporary monetary policy.
| Author | : OECD |
| Publisher | : OECD Publishing |
| Total Pages | : 448 |
| Release | : 2012-11-30 |
| Genre | : |
| ISBN | : 9264189238 |
This manual gives a complete, detailed and up-to-date description of the Eurostat-OECD PPP Programme, including its organisation, the various surveys carried out by participating countries and the ways PPPs are calculated and disseminated. It also provides guidance on the use of PPPs.
| Author | : Ronald MacDonald |
| Publisher | : Routledge |
| Total Pages | : 334 |
| Release | : 2005 |
| Genre | : Foreign exchange |
| ISBN | : 1134838220 |
''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""
| Author | : Alan M. Taylor |
| Publisher | : |
| Total Pages | : 52 |
| Release | : 2004 |
| Genre | : Purchasing power parity |
| ISBN | : |
"Originally propounded by the sixteenth-century scholars of the University of Salamanca, the concept of purchasing power parity (PPP) was revived in the interwar period in the context of the debate concerning the appropriate level at which to re-establish international exchange rate parities. Broadly accepted as a long-run equilibrium condition in the post-war period, it was first advocated as a short-run equilibrium by many international economists in the first few years following the breakdown of the Bretton Woods system in the early 1970s and then increasingly came under attack on both theoretical and empirical grounds from the late 1970s to the mid 1990s. Accordingly, over the last three decades, a large literature has built up that examines how much the data deviated from theory, and the fruits of this research have provided a deeper understanding of how well PPP applies in both the short run and the long run. Since the mid 1990s, larger datasets and nonlinear econometric methods, in particular, have improved estimation. As deviations narrowed between real exchange rates and PPP, so did the gap narrow between theory and data, and some degree of confidence in long-run PPP began to emerge again. In this respect, the idea of long-run PPP now enjoys perhaps its strongest support in more than thirty years, a distinct reversion in economic thought"--NBER website
| Author | : Michael Common |
| Publisher | : Cambridge University Press |
| Total Pages | : 600 |
| Release | : 2005-10-13 |
| Genre | : Business & Economics |
| ISBN | : 9781139445436 |
Taking as its starting point the interdependence of the economy and the natural environment, this book provides a comprehensive introduction to the emerging field of ecological economics. The authors, who have written extensively on the economics of sustainability, build on insights from both mainstream economics and ecological sciences. Part I explores the interdependence of the modern economy and its environment, while Part II focuses mainly on the economy and on economics. Part III looks at how national governments set policy targets and the instruments used to pursue those targets. Part IV examines international trade and institutions, and two major global threats to sustainability - climate change and biodiversity loss. Assuming no prior knowledge of economics, this textbook is well suited for use on interdisciplinary environmental science and management courses. It has extensive student-friendly features including discussion questions and exercises, keyword highlighting, real-world illustrations, further reading and website addresses.
| Author | : J William Petty |
| Publisher | : Pearson Higher Education AU |
| Total Pages | : 809 |
| Release | : 2015-05-20 |
| Genre | : Business & Economics |
| ISBN | : 1442551623 |
The sixth edition of Financial Management provides students with an overview of financial management suited to the first course in finance. The focus of the text is on the big picture, providing an introduction to financial decision making grounded in current financial theory and the current state of world economic conditions. Attention is paid to both valuation and capital markets, as well as their influence on corporate financial decisions. The 10 basic principles of finance are introduced in the first chapter and woven throughout the text, to give students a solid foundation from which to build their knowledge of finance. The goal of this text is to go beyond teaching the tools of a discipline or a trade and help students gain a complete understanding of the subject. This will give them the ability to apply what they have learnt to new and as yet unforeseen problems—in short, to educate students in finance.
| Author | : John Maynard Keynes |
| Publisher | : Cosimo Classics |
| Total Pages | : 240 |
| Release | : 1923 |
| Genre | : Business & Economics |
| ISBN | : |
"The long run is a misleading guide to current affairs. In the long run we are all dead." -John Maynard Keynes, A Tract on Monetary Reform (1923) A Tract on Monetary Reform (1923), by British economist John Maynard Keynes, is a masterly analysis of the world monetary situation at the beginning of the twentieth century. Keynes stated the importance of stable domestic prices and a stable currency for a strong economy, while arguing against the gold standard, which at that time was used for the US dollar and many other currencies. Britain abandoned the gold standard in 1931-after it had re-established it in 1925-and the United States abandoned the gold standard in 1933. A Tract on Monetary Reform is essential reading for anyone interested in Keynes' theories and for students of economics or economic history.
