Shining a Light on Purchasing Power Parities

2020 ◽  
Vol 12 (4) ◽  
pp. 71-108
Author(s):  
Maxim Pinkovskiy ◽  
Xavier Sala-i-Martin
Keyword(s):  
Exchange Rate ◽  
Economic Activity ◽  
Purchasing Power ◽  
Market Exchange ◽  
Price Data ◽  
Nighttime Lights ◽  
Survey Round ◽  
Market Exchange Rate ◽  
Purchasing Power Parities

We use satellite-recorded nighttime lights as an independent benchmark of economic activity in order to generate three findings in the study of PPP-adjusted estimates of GDP. First, PPP-adjusted estimates better describe poor economies than do market exchange rate-based estimates today, although this was not the case in the late 1990s. Second, estimates of PPPs have been steadily improving from one price survey round to the next. Third, it has tended to be optimal to only use the latest price data and to revise existing PPP-adjusted estimates whenever a new price survey is released. (JEL E23, E31, F31, O11, O57)

scholarly journals Recognizing Reality—Unification of Official and Parallel Market Exchange Rates

2021 ◽  
Vol 20 (25) ◽  
Author(s):  
Simon Gray
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Case Studies ◽  
Economic Activity ◽  
Central Banks ◽  
Market Exchange ◽  
Market Clearing ◽  
Economic Agents ◽  
Market Exchange Rate ◽  
Clearing Rate

Some central banks have maintained overvalued official exchange rates, while unable to ensure that supply of foreign exchange meets legitimate demand for current account transactions at that price. A parallel exchange rate market develops, in such circumstances; and when the spread between the official and parallel rates is both substantial and sustained, price levels in the economy typically reflect the parallel market exchange rate. “Recognizing reality” by allowing economic agents to use a market clearing rate benefits economic activity without necessarily leading to more inflation. But a unified, market-clearing exchange rate will not stabilize without a supportive fiscal and monetary context. A number of country case studies are included; my thanks to Jie Ren for pulling together all the data for the country case studies, and the production of the charts.

scholarly journals Purchasing Power Parity and Efficiency of Black Market Exchange Rate in African Countries

2011 ◽  
Vol 47 (5) ◽  
pp. 52-70 ◽  
Author(s):  
Ahmad Zubaidi Baharumshah ◽  
Siti Hamizah Mohd ◽  
Siew-Voon Soon
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Black Market ◽  
Purchasing Power ◽  
Market Exchange ◽  
Power Parity ◽  
African Countries ◽  
Market Exchange Rate

Emerging Market Exchange-Rate Exposure

2007 ◽  
Author(s):  
Timothy K. Chue ◽  
David E. Cook
Keyword(s):  
Exchange Rate ◽  
Emerging Market ◽  
Market Exchange ◽  
Exchange Rate Exposure ◽  
Market Exchange Rate

Inflation and the Black Market Exchange Rate in a Repressed Market: A Model of Venezuela

2016 ◽  
Vol 16 (159) ◽  
pp. 1
Author(s):  
Valerie Cerra ◽  
Keyword(s):  
Exchange Rate ◽  
Black Market ◽  
Market Exchange ◽  
Market Exchange Rate

Money demand and black market exchange rate: a cointegration approach with structural break

2017 ◽  
Vol 7 (2) ◽  
pp. 177
Author(s):  
Charfeddine Lanouar ◽  
Zouhair Mrabet ◽  
Mouyad Al Samara
Keyword(s):  
Exchange Rate ◽  
Money Demand ◽  
Structural Break ◽  
Black Market ◽  
Market Exchange ◽  
Market Exchange Rate

IMF loan conditions will worsen Egyptian discontent

2016 ◽  
Keyword(s):  
Exchange Rate ◽  
Economic Crisis ◽  
Economic Conditions ◽  
Market Exchange ◽  
Medium Term ◽  
Content Type ◽  
Political Dissent ◽  
Market Exchange Rate ◽  
Economic Collapse ◽  
The Government

Significance The government's struggle to stave off economic collapse has become increasingly frantic, as inflation has surged, the gap between the official and black market exchange rate has reached or exceeded 100%, and consumers have difficulty finding basics such as sugar and rice. Impacts Increased incidents of popular protests and political dissent reflect worsening economic conditions. Measures to be taken as part of the IMF deal, notably devaluation and further subsidy cuts, could exacerbate social and political tensions. Sisi will deflect some of the blame for the economic crisis onto the government and the central bank. If the government survives this crisis, the economy could recover in the medium term.

Black Market Exchange Rate versus the Official Rate in Testing the PPP: An Application of a Non-Linear Test

2007 ◽  
Vol 49 (4) ◽  
pp. 632-641 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Altin Tanku
Keyword(s):  
Exchange Rate ◽  
Black Market ◽  
Market Exchange ◽  
Rate Versus ◽  
Non Linear ◽  
Official Rate ◽  
Market Exchange Rate
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