Purchasing power parity

relative purchasing power parity hold?” is one of great interest to economists. It is of interests to economist because it involves the percentage change of exchange rates and the difference between the percentage changes in national price levels. The definition of relative purchasing power parity is, “the percentage change in the exchange rate between two currencies over any period equals the difference between the percentage changes in national price levels” (Krugman 416). This is important to economists because it allows them to examine change in exchange rates and the percentage changes in prices to help predict what will happen next in the economies. Not only can economists compare the percentage change in exchange…

the Yen has experienced a never before seen strength in terms of the dollar and now stands at 1 USD = 120.44 Yen according to Bloomberg figures as at November 1st 2015. As mentioned previously, Japan is one of the world’s largest economic powers. It also serves as the United States fourth largest trading partner. These two economies are closely intertwined through trade and capital flows, and according to a 2012 estimate together they account for over 30% of the world domestic product. To…

produced within the country in a specific period of time. The bar chart illustrates Vietnam’s GDP growth by USD billion from 2006 to 2015. Vietnam’s nominal GDP in 2015 reached the highest ever with 168.2 at 5.4% of growth rate. The GDP value of Vietnam represents 0.30 percent of the world economy. GDP in Vietnam averaged 55.42 USD Billion from 1985 until 2014, reaching an all time high of 186.20 USD Billion in 2014 and a record low of 6.30 USD Billion in 1989. Vietnam ranked 55th worldwide in…

countries, India has possessed the right ingredients for this transformation. However, because of its combination of a closed economy and a democratic government, changes were slow to come. India is in a different place now; it has been growing rapidly: inflation has eased, international investors are bullish on India and the Modi administration has been making changes its priority. If it keeps up with this development consistently, within the next decade, India’s GDP could surpass that of China…

When perusing the CIA’s world fact-book distribution of family income gini index, 2 countries stood out; Australia and Denmark. These 3 counties are all developed, so theoretically inequalities are more systemic than due to the process of development, and all three have global interests, so gross domestic product, or GDP, can be meaningfully compared to measure output. While some markers are hard to directly compare, each countries ladder of opportunities, social welfare programs and taxations…

rapidly expanding and the unemployment rate continues its historic low of under 5%, both of which lead to a higher marginal propensity to consume. Brazil’s location and large population add to their already strong influence throughout South America which make it a dependable investment for trade and commerce between other countries. Brazil is expected to become the fifth largest economy in the next decades due to its growing domestic economy. There are 202 million people in Brazil opening many…

According to the World Bank in 2014, nominal GDP totaled $77,868,767,983,902 globally. Together, number two China, and number nine India produced 15.95891% of this figure. However, looking at GDP from a Purchasing Power Parity standpoint, China moves into the top spot and India rises to number 3, totaling an even greater percentage of 23.440035% of the global GDP. The Asian nations’ amply populated workforce has cultivated an environment rich in opportunity, at low costs to companies,…

Comparison of the Australian and Indonesian economy Intro: Australian economy. Australia is classified by the World Bank as a developed country because its gross domestic product was US$1015 billion in purchasing power parity terms in 2008. Its per capita income was US$37,250 per annum, ranking it 11th highest in the world in terms of per capita income. The main sectors of the Australian economy include agriculture, forestry, fishing, mining, manufacturing and service. Indonesian economy.…

There are many reasons to why people are starting to prefer American made items over imported goods. It seems that many individuals are increasingly going out of their way to purchase items, mainly, clothing that has the label of “Made in America”. The question is why is this trend becoming so popular? Could the reasons be, because of quality and a certain class that can afford these items? Or is it because of jobs coming to America?. Or is it having pride in America? No matter the case, the…

The whole research was based on the individual secondary research. All the statistical data were obtained from the dataset of official statistics. The CPI in Japan and the Indian CPI were drawn from the World Bank Group and the nominal exchange rate came from the IMF. For collecting these data, it is no doubt that the secondary research method was the feasible way in comparison with the primary research. However, there were three limitations of the entire research. The first source of weakness…