Does purchasing power parity (PPP) hold in the long run? Does it hold in the short run?

Question:

Does purchasing power parity (PPP) hold in the long run? Does it hold in the short run? Following text equation (3), plot for Japan and the United States beginning in 1972 the percent change from a year ago of the Japanese yen/U.S. dollar exchange rate (FRED code: EXJPUS) minus the annual inflation rate in Japan (FRED code: JPNCPIALLMINMEI) plus the annual inflation rate in the United States (FRED code: CPIAUCSL). If PPP holds in the long run, what should this expression equal on average? Download the data and compute the average for the full period. Is the result consistent with long-run PPP? Observing the plot, does PPP seem to hold in the short run?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...

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