publication . Preprint . Book . 1985

Purchasing Power Parity

Rudiger Dornbusch;
Open Access
  • Published: 01 Mar 1985
Abstract
The paper is a survey of PPP theory and evidence prepared for the New Palgrave dictionary of economics. Following a statement of the absolute and relative versions of the theory, there is a brief sketch of the history of thought with emphasis on Cassel and the monetary approach. A theoretical part distinguishes structural and transitory deviations from PPP. The main basis for structural deviations is the Ricardo-Harrod-Balassa-Samuelson model of productivity differentials that affect the real prices of home goods and hence real price levels. Transitory deviations emerge from differential speeds of goods and assets markets. In particular sticky wages combined wit...
Subjects
free text keywords: Development Studies,

Aizenman, J. (1984), "Testing Deviations from Purchasing Power Parity (ppp)" NBER Working Paper No 1475, October. [OpenAIRE]

Balassa, B. (1964), "The Purchasing Power Parity Doctrine: A Reappraisal," Journal of Political Economy, December.

Metzler, L. A. et.al. (1947), 'International Monetary Policies," Board of Governors of the Federal Reserve, Postwar Economic Studies, No.7,

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publication . Preprint . Book . 1985

Purchasing Power Parity

Rudiger Dornbusch;