Why might it be that relative PPP holds better in the long run than the short run?

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Why might it be that relative PPP holds better in the long run than the short run? (Think about how international trading firms might react to large and persistent cross- border differences in the prices of a tradable good.)

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International Economics Theory & Policy

ISBN: 9780138002121

8th Edition

Authors: Paul R Krugman, Maurice Obstfeld

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Question Posted: Oct 02, 2024 06:01 AM

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Why might it be that relative PPP holds better in the long run than the short run?

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International Economics Theory & Policy

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