Question
How you do calculate relative Purchasing Power Parity in 3 months time using current inflation rate for both countries and exchange rate? GBP/AUD = Spot
How you do calculate relative Purchasing Power Parity in 3 months time using current inflation rate for both countries and exchange rate?
GBP/AUD = Spot Exchange
Pi = current inflation (domestic)
Pi* = current inflation (foreign)
S1 = S0(1+Pi / 1+Pi*)
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Quantitative Methods for Business
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
13th edition
1285866312, 978-0357685648, 978-1285866314
