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Does Purchasing Power Parity holds in reality ?

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Question ajoutée par Utilisateur supprimé
Date de publication: 2014/08/14
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

This is an imaginary situation, One cannot buy the same quantity of Goods in the same manner in two Currencies converted pari pasu with the prevailing exchange rates.  This is an economic situation ascertained on the basis of  principle of "Certis pari pasu"--means other conditions remains the same. It is based on many other factors prevailing in two countries and their GDP.   Certain items will tend to exemplify the theory--e.g. Pizzas from reputed brands, Gold and precious metals- more or less similar pattern;  but for majority of items it is not like that.  Major example:  Price of Purified Drinking water.  

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