What is purchasing power parity

Assignment Help Financial Management

Reference no: EM132062406

What is purchasing power parity (PPP)? Discuss how theory diverges from findings of empirical studies and why does it happens? You should use an appropriate theoretical model to explain the ‘overshooting’ behaviour of exchange rates in the short run. Discuss the main features of this model and its appropriateness in explaining ‘over-shooting’ behaviour.

Reference no: EM132062406

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