purchasing power parity

Download Purchasing Power Parity

Post on 20-Jun-2015

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  • 1. Purchasing Power Parity

2. Before we discuss PPP theory let us dig out
something from our previous knowledge

  • Exchange Rate

3. Spot Rate 4. Forward Rate 5. Direct and Indirect Quote

  • Arbitrage

6. Purchasing Power 7. Inflation 8. Perfect or Efficient markets
9. We will try to find the answers for the following?

  • Can we predict the changes in exchange rate?

10. Does inflation affect exchange rate? 11. If it does, how? 12. Does interest rate affect exchange rate? 13. If it does, how? 14. How can we arrive at a more proper and actual exchange rate?

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