2017 Student Research Conference:
30th Annual Student Research Conference

Development and Relative Purchasing Power Parity: A Dyadic Analysis
Adrian Lopez
Dr. Xiaofen Chen, Faculty Mentor

Forecasting exchange rates is of tremendous value to governments, citizens, and businesses alike. Governments seldom survive monetary crises, depreciation increases the trade balance but is also associated with domestic inflation, while appreciation hurts exporters. PPP attempts to predict long run exchange rates but because of the enormous amount of variables involved, forecasts are often flawed. This study will attempt to illuminate the effects of one possible flaw: relative levels of economic development. Do the exchange rates of countries with similar levels of development adhere to PPP theory more often than asymmetrically developed countries or does development play no role at all? Using dyadic analysis of multiple countries, this study examines and hopefully answers this question.

Keywords: International Monetary Theory, Exchange Rates, Relative Development, Purchasing Power Parity

Topic(s):Economics

Presentation Type: Oral Paper

Session: 109-1
Location: VH 1320
Time: 8:00

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