Concept information
Preferred term
purchasing power parity
Definition
- The theory of purchasing power parity (PPP) explains movements in exchange rates by changes in countries' price levels. It is derived from the “law of one price,” which says that identical goods should sell for the same price in all countries if there are no impediments to international trade. [Source: Encyclopedia of Business in Today's World; Purchasing Power Parity]
Broader concept
Belongs to group
URI
https://concepts.sagepub.com/social-science/concept/purchasing_power_parity
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