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What are the parity conditions in international finance? Discuss each one and highlight their economic implications (for example, if the inflation rate in one country
What are the parity conditions in international finance? Discuss each one and highlight their economic implications (for example, if the inflation rate in one country is higher than another, what does this imply about expected changes in currency value). Dont just state the implications but rather convince the reader how the economic changes are expected to come about. Which parity condition is most strongly empirically supported? Why do you think that most parity conditions are difficult to test empirically?
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