Reflections on purchasing power parities and real values

Szilágyi, György (1999) Reflections on purchasing power parities and real values. Hungarian Statistical Review, 77 (SN3). pp. 44-48. ISSN 0039-0690

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Abstract

The article investigates the nature of purchasing power parities and real values in the framework of multilateral international comparisons. It discusses the modification in the definition of these terms in the conditions of multilateral exercises. The relevant properties of these calculations, transitivity and base country invariance are also displayed. On the basis of these properties, discussion focuses on the term ‘numeraire’. Various versions of this ‘artificial monetary unit’ is presented, that differ in terms of two characteristics: to what extent exchange rates be used and which currency be chosen to derive the numeraire.

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