Purchasing Power Parity (PPP)
purchasing power parity, ppp, compares different countries' currencies through a market basket of goods approach. two currencies are in ppp when a market basket of goods, taking into account the exchange rate, is priced the same in both countries. ppp currency rates are considered more accurate than market-exchange rates. market-exchange rates, set on the foreign exchange market, tend to be influenced by other factors such as government intervention, different interest rates, speculation trading and hedging. ppp rates are determined by comparing the prices of identical items in different countries. ppp rates are often difficult to determine because of differences in purchasing habits among the citizens of different countries, unequal quality of goods in those countries and differences in each countries' economy. but, once the ppp rate is determined, it remains relatively constant over the long run. ppp is often used to make more accurate comparisons between two countries' gross domestic product, gdp, than can be made when using market-exchange rates. for example, let's look at two rival countries, ? and ?. each country produces the same amount of goods in a given year. thus, the gdp should be the same for each country. but, because ? manipulates its currency on the world market, its currency is artificially high when compared to ?'s currency. it takes three ? dollars to buy one ?. so, using the market-exchange rate to compare gdps, it would look as if ?'s gdp will three times a size of ?'s when expressed in the same currency. using the ppp exchange rate will eliminate this bias and show that the gdp for each country is the same.
- purchasing power parity（ppp）・・・購買力平価→https://ja.wikipedia.org/wiki/%E8%B3%BC%E8%B2%B7%E5%8A%9B%E5%B9%B3%E4%BE%A1%E8%AA%AC
- market basket・・・マーケットバスケット