Purchasing Power Parity - its theoretical perspective and empirical evidence

its theoretical perspective and empirical evidence

Business & Finance, Finance & Investing, Finance
Cover of the book Purchasing Power Parity - its theoretical perspective and empirical evidence by Marc Munzer, GRIN Publishing
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Marc Munzer ISBN: 9783640404704
Publisher: GRIN Publishing Publication: August 19, 2009
Imprint: GRIN Publishing Language: English
Author: Marc Munzer
ISBN: 9783640404704
Publisher: GRIN Publishing
Publication: August 19, 2009
Imprint: GRIN Publishing
Language: English

Seminar paper from the year 2009 in the subject Business economics - Investment and Finance, grade: 1,3, University of Hull, language: English, abstract: The Swedish economist Gustav Cassel developed his theory of Purchasing Power Parity (henceforth PPP) more than 80 years. Ago, and today it is still an essential part of the framework for forecasting exchange rates, which includes parity conditions in international finance. International parity conditions imply purchasing power parity, the Fisher effect, the interest rate parity theory and the expectations theory. 'They are the set of equilibrium relationships which should hold between product prices, interest rates, and spot and forward exchange rates assuming a freely floating exchange system.' (Demirag and Goddard, 1994, 70) Unfortunately, these theories do not always work out in reality, especially in times of financial crisis. However, they give us a central understanding of how and why multinational business is related in the world. Sometimes, 'the mistake is not always in the theory itself, but in the way it is interpreted or applied in practice' (Eitemann et.al., 2004, 133). This essay will take a detailed look at PPP, its theoretical perspective, and the empirical evidence for it. [...]

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Seminar paper from the year 2009 in the subject Business economics - Investment and Finance, grade: 1,3, University of Hull, language: English, abstract: The Swedish economist Gustav Cassel developed his theory of Purchasing Power Parity (henceforth PPP) more than 80 years. Ago, and today it is still an essential part of the framework for forecasting exchange rates, which includes parity conditions in international finance. International parity conditions imply purchasing power parity, the Fisher effect, the interest rate parity theory and the expectations theory. 'They are the set of equilibrium relationships which should hold between product prices, interest rates, and spot and forward exchange rates assuming a freely floating exchange system.' (Demirag and Goddard, 1994, 70) Unfortunately, these theories do not always work out in reality, especially in times of financial crisis. However, they give us a central understanding of how and why multinational business is related in the world. Sometimes, 'the mistake is not always in the theory itself, but in the way it is interpreted or applied in practice' (Eitemann et.al., 2004, 133). This essay will take a detailed look at PPP, its theoretical perspective, and the empirical evidence for it. [...]

More books from GRIN Publishing

Cover of the book Strategies of multinational corporations in the emerging markets China and India by Marc Munzer
Cover of the book Canadian foreign policy after the Westminster Statute of 1931 -The shift from British hegemon to an American one by Marc Munzer
Cover of the book China's distinctive links with Africa by Marc Munzer
Cover of the book Development aid and transformation process in Africa by Marc Munzer
Cover of the book Anglicisms in German by Marc Munzer
Cover of the book Principles and Practices of Research Quality Assurance - Ethics by Marc Munzer
Cover of the book To what extent does Oliver Stone's Vietnam Trilogy represent the truth about the realities of the war? by Marc Munzer
Cover of the book Immigration Policy in Canada by Marc Munzer
Cover of the book The Baltic Sea Region by Marc Munzer
Cover of the book Abortion in J. Rawls's 'A Theory of Justice' and 'Political Liberalism' and R. Dworkin's 'Life's Dominion' by Marc Munzer
Cover of the book Unemployed MBA Graduate Diary by Marc Munzer
Cover of the book Unternehmenskultur im Umfeld von Fusionen und Übernahmen und die Auswirkung auf Unternehmenskennzahlen by Marc Munzer
Cover of the book Zur natürlichen Selbstorganisation - Vom Sein zum Werden by Marc Munzer
Cover of the book Video On Demand - Television For A New Millenium by Marc Munzer
Cover of the book Das Nibelungenlied - medieval society and modern usage by Marc Munzer
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy