What Is Purchasing Power Parity (PPP)? - Deepstash
What is PPP ?

PPP is an economic theory that compares different countries' currencies through a "basket of goods" approach.

According to this concept, two currencies

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What Is Purchasing Power Parity (PPP)?

investopedia.com

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What is it used for ?

PPP as a theoretical exchange rate allows you to buy the same amount of goods and services in every country.

Eg: If you want to live inexpensively and you can move to any cou...

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Calculating PPP?

The relative version of PPP is calculated as

S=P1/P2

S= Exchange rate of currency 1 to cur...

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A meaningful comparison of prices across countries requires a wide range of goods and services. To facilitate this University of Pennsylvania and UN joined forces to establish International Compari...

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 The World Bank releases a report that compares the productivity and growth of various countries in terms of PPP and U.S. dollars.

The International Monetary Fund and the Organization for Eco...

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Pairing PPP vs GDP

Accounting GDP for PPP value.

This adjustment attempts to convert nominal GDP into a number more easily comparable between countries with different currencies.

To better understand, sup...

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Some factors explain why PPP is not a good reflection of reality.

  • Tax differences: Government sales taxes such as the value-added tax (VAT) can spike prices in one count...

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