Purchasing Power Parity Debunked: Exchange Rates Unleashed in Global Economies
The article examines whether the idea of purchasing power parity holds true for eight countries from 1993 to 2014. They used various tests to see if exchange rates and consumer prices are related. The results show that purchasing power parity may not be valid for all countries, depending on the method used. The study suggests that developed countries and emerging markets do not support the idea of purchasing power parity.