PPP - Purchasing Power Parity - MBACalculator.com

[hibandaify]

this is like a podcast in that the lecturer is talking but he is doing little to write or change slide for us to follow

[ertreri]

I would like to know if there is Any name for those listings where Instead of comparing Exachange Rates, what you are listing is the Amount of Hours you have to Work - in that country - to buy a certain basket of goods there.

For instance, Buying a Bic Mac in Portugal may require - in average - for one to work half an hour; and 19 minutes in norway.

What are those listings called?

[RTX94]

@ertreri The Big Mac Index or the Big Mac PPP, if I am not mistaken.

[ertreri]

And all of this is done to see if one's country is either more expensive or less expensive then the Foreigner. (Relative to the goods in the basket)

And more importantly, the PPP rate is highly subjective to compare the standard of living in different countries because it highly depends on what you put in the basket.

If you would compare Big Macs in Norway to USA, norway would be way more expensive.

Now you put a Nose Job in the basket, and sudenly, America is not that attractive.

[ertreri]

Sorry but, now that I perfectly undestand what the PPP exchange rates are, you presentation is kind of poor.

You don't make it at all clear that by calculation a PPP rate, you are just obtaining a theoretical Exchange Rate that should traduce the value of my money in some different currency.

And that it' s ONLY, single PURPOSE, is to be campared to the ACTUAL true excahnge rate. By the dividing the PPP rate by the true exchange rate,

[GerryBB]

I'm sorry all I hear from your presentation is BigMac.