Absolute and Relative Purchasing Power Parity

Lawrence H. Officer ()
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Lawrence H. Officer: University of Illinois at Chicago

Chapter Chapter 5 in Essays in Economic History, 2022, pp 85-100 from Springer

Abstract: Abstract The relationship between the absolute and relative purchasing-power-parity (PPP) theories is restated theoretically. Then the relative PPP theory is tested using the GDP deflator and the cost of living as price-level concepts. The time periods are encompassed by 1950–1975; the countries are mainly but not exclusively in the Western industrial mode. It turns out that relative PPP is strongly supported by the evidence.

Keywords: Purchasing power parity; Absolute PPP; Relative PPP; Price variable; Testing PPP (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-95925-8_5

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DOI: 10.1007/978-3-030-95925-8_5

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