What Rupee Weakness Says About Fundamentals

English economist Joan Robinson once pointed out that for every statement about India, the opposite is also true. The same can be said for exchange rates. For any theory of exchange rate behavior, the reverse is also true. This is why it is often said that for exchange rate forecasts …

Read More »

McDonald’s MacCoin Promotion Delivers Important Lesson in Economics – Quartz

[ad_1] It’s the big 5-0 for the Big Mac, and McDonald’s is doing something special to celebrate the best-selling burger. Since it is 2018, what better way to mark the occasion than by launching a fancy pseudo-cryptocurrency? Starting tomorrow (August 2), McDonald’s will be distributing over 6 million “MacCoins” to …

Read More »

Issues with using PPP-based exchange rates

Ever since Larry Summers and Alan Heston produced what became known as the “Penn World Tables” comparing the prices and therefore the purchasing power of currencies between countries, the urge to use a currency rate deflator Market exchange to compare income between countries has been strong. The underlying economic theory …

Read More »

How much does a Starbucks coffee cost?

How much does a Starbucks coffee cost? -WSJ Skip to main contentSkip to search Customers consume food and drinks on the terrace of a Starbucks cafe in the Avenues shopping mall in Kuwait City, Kuwait in August. Photographer: Tasneem Alsultan/Bloomberg News Markets With a large latte costing $1.53 in Cairo …

Read More »

What is Purchasing Power Parity?

Macroeconomic analysis uses several different measures to compare economic productivity and living standards across countries and over time. A popular measure is purchasing power parity (PPP). Purchasing Power Parity (PPP) is an economic theory that compares the currencies of different countries through a “basket of goods” approach to the market. …

Read More »

Definition of Relative Purchasing Power Parity (RPPA)

What is Relative Purchasing Power Parity (RPPA)? Relative purchasing power parity (RPPA) is an extension of traditional purchasing power parity (PPP) theory to include changes in inflation over time. Purchasing power is the power of money expressed by the number of goods or services a unit can buy, which can …

Read More »

What is purchasing power parity (PPP)?

A popular macroeconomic analysis measure for comparing economic productivity and living standards across countries is purchasing power parity (PPP). PPP is an economic theory that compares the currencies of different countries through a “basket of goods” approach, not to be confused with the Paycheck Protection Program created by the CARES …

Read More »

Definition of devaluation

What is devaluation? Devaluation is the deliberate downward adjustment of the value of a country’s currency against another currency, a group of currencies or a monetary standard. Countries that have a fixed exchange rate or a semi-fixed exchange rate use this monetary policy tool. It is often confused with depreciation …

Read More »