purchasing power parity


purchasing power parity
The notion that the ratio between domestic and foreign price levels should equal the equilibrium exchange rate between domestic and foreign currencies. Bloomberg Financial Dictionary

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purchasing power parity purchasing power parity parity

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   ► See PPP.

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purchasing power parity UK US noun [U] (ABBREVIATION PPP) ECONOMICS
a measure of how much one unit of a currency would buy in different countries, calculated by comparing the price of one or more particular products in each country. Purchasing power parity is used to judge if currency exchange rates are correct in relation to what can be bought with different currencies: »

The theory of purchasing power parity says that, over time, exchange rates should equalize the prices of an identical basket of goods and services in any two countries.


Financial and business terms. 2012.

Look at other dictionaries:

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  • Purchasing Power Parity — Parité de pouvoir d achat Pour les articles homonymes, voir Parité et PPA. La parité de pouvoir d achat (PPA) (on parle de valeurs mesurées en parité de pouvoir d achat) est une méthode utilisée en économie pour établir une comparaison entre pays …   Wikipédia en Français

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  • Relative purchasing power parity (RPPP) — Idea that the rate of change in the price level of commodities in one country relative to the price level in another determines the rate of change of the exchange rate between the two countries currencies. The New York Times Financial Glossary …   Financial and business terms