15: PURCHASING POWER PARITY | Forex
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15: PURCHASING POWER PARITY- ECONOMIC THEORIES AND MODELS Check out the entire free forex course (in process): http://www.www.informedtrades.com/f7/ The Free Forex Academy is a partner of InformedTrades.com, a community of traders dedicated to learning. At the Free Forex Academy, we are in the beginning stages of creating an entire comprehensive series of courses on forex trading. This is the 15th vid in the fundamentals series. Practice forex trading with real time charts and live price feeds for free while you learn. Get a totally free virtual trading account here- http://bit.ly/IT-forex-demo3 Music: Danse Macabre - Low Strings Finale (Theme) Exotic Battle Machinations Kevin MacLeod incompetech.com
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How 'similar' are goods, though? A knockoff automobile in China may not meet the standards of the American or European design upon which it was based. To say a car purchased for $10,000 in China matches the same design built in America for $20,000 means you can give double the PPP rate for the $10,000 Chinese knockoff is inaccurate. Not all goods are like cell phones. Not all goods and services are so identical when manufacturing may be substandard in various places with different levels of quality.
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I like your videos, I just hate their music!!
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Measured by pp, Chinese idiots are way richer than Norwegian or Danish Ronald McDonalds's.
There's hope for Humanity. -
thank you!
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What does it then mean when GDP per capita is adjusted for purchasing power parity? I thought that PPP was more of a phenomenon that occurs when prices are lower in one country leading to higher demands which again lead to higher prices.
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what??? this guy is using Kenya,,,,is this a co-incidence or something??
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the music is horrible, otherwise helpful video
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Purchasing Power Parity was almost ignored after its invention until a few savvy right-wing politicians realised that it made economies with great wealth inequalities appear much richer than economies with fairer distributions of wealth. In reality, cheaper hamburgers=lower pay, unsafe and longer working hours for hamburger flippers. A Maid Index would be a more honest way to explain Purchasing Power Parity. Obviously cheaper Maids means more money left over for everyone to buy more servants!
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So much for the Efficient Market hypothesis then! Apparently, well according to this video, you can beat the market professionals by buying and selling currency at its PPP value! The currency exchangers are not pricing the future value of the currency they're trading in. Naive nonsense! It's got nothing to do with currencies being priced wrong by the market. No, the greater the wealth inequality in a country the higher its PPP to nominal GDP ratio. The Big Mac index, what next? The Maid index?
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Good
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Great Video !!, Now that I know what PPP is, can u throw some light on what GDP by PPP as opposed to nominal GDP of a nation is ? Thanks
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thank you! helped me while studying for an exam :D
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thats my homework done!
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WOW AMAZING
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Really helpful, thanks!
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in a perfect world the theory would be a great way to understand trade deficits and such. however, the access to trade affects it, artificial factors like subsidies affect it, unknown factors such as conspiracies to keep prices on certain items low or certain items high affects it, i.e. housing prices, gold prices, corn products etc. I do not trust any modern government not to mess with prices so much that I think the purchasing power theory needs to be thrown out.
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another great video!!