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The New Palgrave Dictionary of Economics pp 11031–11050Cite as

Palgrave Macmillan

Purchasing Power Parity

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Abstract

This article expounds the purchasing power parity (PPP) hypothesis as a theory of exchange rate determination. The long history of PPP and its contribution to thinking in international finance is discussed, with reference to implications both for open economy theory and for economic policy. The large literature on empirical testing of the validity of PPP is reviewed, with particular reference to work carried out since 1990.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Lucio Sarno

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  1. Lucio Sarno
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Sarno, L. (2018). Purchasing Power Parity. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1834

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