Advantages and Drawbacks of Undervalued Versus Overvalued Currencies

© 2019 Prof. Farok J. Contractor, Rutgers University Also See the Companion Post:  Is the Indian Rupee Undervalued or Overvalued? What Purchasing Power Parity Theory Tells Us Currencies can be undervalued (very devalued) for natural reasons, such as political crises causing the rest of the world to become wary of holding that country’s assets or currency … Continue reading Advantages and Drawbacks of Undervalued Versus Overvalued Currencies

Is the Indian Rupee Undervalued or Overvalued? What Purchasing Power Parity Theory Tells Us

2019 Prof. Farok J. Contractor, Rutgers University Also See the Companion Post:  Advantages and Drawbacks of Undervalued Versus Overvalued Currencies The basic idea of purchasing power parity (PPP) theory is that money, as such, has no value. It is merely a piece of metal, paper, or plastic—or even a phantasmic electronic entry. What gives money … Continue reading Is the Indian Rupee Undervalued or Overvalued? What Purchasing Power Parity Theory Tells Us