# Questions tagged [purchasing-power-partity]

Purchasing power parity (PPP) is the rate of currency conversion that equalizes the purchasing power of different currencies, by eliminating the differences in price levels between countries.

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### Is this logical contradiction in explanation of Big Mac Index calculation or am I wrong?

Let we have currency A and currency B. In the first country 1A=50B and Big Mac costs 2A. In the second country Big Mac costs 200B. Old exchange rate: 1A=50B New exchange rate must be: 200B/2A=100(B/A)....
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### How does Turkey have higher labour productivity than Portugal and Romania but lower GDP per capita PPP?

I avoided using nominal GDP per Capita because of Lira devaluation. Here is the labour productivity of Turkey, Portugal, Romania and some other countries (2022) https://data.oecd.org/lprdty/gdp-per-...
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### Purchasing power parity and cointegrating vectors

I am testing for the existence of purchasing power parity (PPP) relationships using cointegration tests, among others, and I am a bit tempted to test whether or not my cointegrating vectors are equal ...
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### Seeking Insights on Cross-Country Savings Behavior Analysis: Addressing Income Distribution and Purchasing Power Parity Challenges

I possess data from various countries, including a diverse mix such as the USA, Slovenia, and Chile, covering a wide range of GDP per capita levels. This data encompasses individual and household ...
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### Purchasing power of US dollar during its history

Is there an online tool to calculate how many goods (and which ones, of course) I could buy in a specific year in the past, e.g., 1792, 1800, 1810, 1820, and so on for a given number of US dollars? ...
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### Cost of money in historical prose

When reading British prose, e.g. a novel by Daniel Defoe (1660-1731) or P. G. Wodehouse (1881-1975), I would like to understand the real cost of money there, which have been changed over time, of ...
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### Currency vs purchasing power?

When I search the internet about which is the strongest currency, the answer is the currency which buys more from other currencies. For example if 1 euro can buy 10 dollars then euro is a stronger ...
1 vote
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### Do polish people have more purchasing power than that of the Irish?

The following table was taken from data.oecd.org: This link gives the Big Mac index. Big Mac Index of Ireland = 4.61 Big Mac Index of Poland = 2.65 Does this mean that Polish people in Poland have ...
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### How to make sense of Lebanese currency values in USD with a PPP conversion factor?

For example, I have data from a survey of adult citizens in 2014 showing an average annual salary of about 20000 LCU. I would like to find a comparable measure of the standard of living in Lebanon ...
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### Why is there such a big difference of purchasing power toward Coca-Cola between Euro in France and USD in USA, comparing to Big-Mac?

I have an assignment that requires me to pick an item and use it to create my own price level index, similar to Big-Mac index. In March 2021, the price of 0.5 litre Coca-Cola in France was 0.97 Euro ...
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### What are the main causes of disparity between nominal and PPP exchange rates?

(I'm not a student of economics and I have no idea about correct terminology and things. ) I've seen the acronym "PPP" in various places for a long time, but it's only recently I became ...
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### Price level and purchasing power of currency(PPP)

This could be a silly question, but I'm a bit confused with this concept. Don't we say usually the purchasing power(or value) of currency(or money) is low when the price level is high in one country(i....
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### Comparing Real GDP with different base years and currencies

I have a quarterly panel data of several countries. I have taken the data from Fred. Some countries' real gdp is in chained 2010 prices and some in other years (such as 2015 and 2018). How can I make ...
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### Creating a pragmatic, useable (not theory heavy) proxy for a currency basket for a set of economies

This is currently, a gedanken experiment, but may well form the basis of a whitepaper - or better still, an actual project. I am trying to come up with a practical way of creating a "currency ...
1 vote
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### Big Mac Index based on other products or services?

The Big Mac Index compares the cost of a McDonalds Big Mac in different currencies around the world. In doing so, it provides: an informal way of measuring the purchasing power parity (PPP) between ...
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### Is wealth created when money is transferred from a wealthy country to a less wealthy country?

Imagine a person based in India is working for a client in the USA. The client pays the person 100 USD. The currency is converted into INR, which turns out to be 100 * 74 = 7400 INR. But if we convert ...
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### How do you stop Hyperinflation in a Nation?

In history, I learned that the Weimar Republic had hyperinflation as a consequence of leading and striving war during World War I and placed a new currency named German Rentenmark which would be about ...
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### Measure of value of a product expressed as a price using the currency of the domain country (e.g. USA)

I do not really know much about economics, but I need to do a price comparision of a certain product between countries in Europe. The product is a pack of specific brand of cigarettes. We know that ...
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### In which country does my money have the largest purchasing power?

To be honest i have literaly zero economic knowlegde so please treat me as a noobie in this case. Here is the questin: I live in Poland where my native currency is polish zloty (PLN), and i want to ...
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### What is the best way to compare the price of a GB of internet across countries

I have the average price of a GB of data / internet across 45 different countries. I want to be able to compare the price of using data on the people in that country. Let's say 1 GB of data costs 1.37 ...
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### What is the best measure for the world's economic cycle?

I'm trying to make a graph that shows how the return of major assets (S&P 500 index, % of 3Y T-notes, oil, gold, etc) move along with the world's expansion& recession cycle. I looked into ...
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### Is there any up-to-date list of hours of work needed to buy a Big Mac?

Is there any up-to-date list of hours of work needed to buy a Big Mac? I have found only up to 2018.
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### Why is Pakistan's GDP higher than Bangladesh in PPP but lower in Nominal?

Why is Pakistan's GDP higher than Bangladesh in PPP but lower in Nominal? Kindly explain in layman's terms.
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### How are PPP, nominal exchange rates and inflation related?

This Forbes article discusses how changes in the market exchange rate can be used to estimate an inflation rate thanks to the principle of purchasing power parity (PPP). Can someone distill this ...
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### If a Chinese person wants to buy an iPhone or any international goods, which GDP per capita would be a better indicator?

Which GDP per capita of a Chinese citizen would better reflect their affordability- Nominal GDP per capita or PPP GDP per capita of China? My question is would PPP would matter much in case of buying ...
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### How long can I live in the United States with my German monthly income?

I see different (more or less abstract resp. specific) approaches to compare wealth (of individuals, regions, and countries): by living standards by living expenses by incomes/salaries by purchasing ...
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### How to adjust salaries of more than two countries to a common year given that the data was collected in different years?

I want to compare salaries of more than two countries. The data I am using is based on the Occupational Wages around the World (OWW) database. Let's say I want to look at the salaries of the nurse. ...
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