April 17, 2023 /Economy/ — Purchasing-power parity (PPP) is a measure of the value of different currencies, taking into account the cost of living in different countries. It is often used to compare the standard of living in different countries.
Exchange rates, on the other hand, are the prices of one currency in terms of another. They are determined by supply and demand in the foreign exchange market.
There are a few reasons why PPP is a better metric for comparing people’s well-being than exchange rates. Continue reading