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EQUILIBRIUM EXCHANGE RATE

Statistics Directorate    
Definition:
The equilibrium exchange rate is the long-term exchange rate that equals the purchasing power parity (PPP) of a currency in a world where all goods are traded and where markets are fully efficient. Such convergence, proposed by the “PPP theory of exchange rates” would imply that the same price levels should be observed across countries.

Source Publication:
Purchasing power parities – measurement and uses, P. Schreyer, F. Koechlin, OECD Statistics Brief, March 2002, No. 3, page 7.

Statistical Theme: Prices and purchasing power partities

Created on Thursday, May 02, 2002