PPP Series

The PPP Series measure real exchange rates (RERs) for targeted economies with respect to the US.

Using online prices, we compute the relative cost of a basket of identical goods in each country versus the US and signal RER deviations from PPP (Purchasing Power Parity) or RER historic averages.

Our RERs use a common basket of ~250 product categories matched across countries including food, electronics and fuel, avoiding biases typically found in single-item calculations or methodologies based on CPIs.

Our series are updated daily and released at the beginning of the following month.

The PPP Series includes: charts on real exchange rates (RER); relative prices (RP); overvaluation under PPP or RER historic averages; and expected nominal exchange rates under PPP or RER historic averages (examples on the right).

Access

PriceStats distributes the PPP series through State Street, as part of our exclusive partnership.

We have made the series available on our website with a 1-month lag in order to facilitate access to those who aren’t traditional clients of State Street. Please contact us for access to more recent data.

Helpful Links

Series in the PPP Portfolio
PPP Advantages
Contact Us

Close

Series in the PPP Portfolio


Real Exchange Rate (RER): measures the US-dollar cost of a basket of identical goods for the selected country relative to the US (RER=E*Pcountry/Pus). The nominal exchange rate (E) is measured in dollars per unit of the selected country’s currency. Pcountry is measured in units of the selected country’s currency. Pus is measured in dollars.

Components: shows the two separate components used in the RER calculation, the nominal exchange rate (E) and the relative price levels between the selected country and the US (Pcountry/Pus).

Overvaluation: measures RER over/undervaluation in % against PPP or historic average.

Expected Nominal Exchange Rate: measures the nominal exchange rate that should hold under PPP or historic average. It is shown against the market nominal exchange rate.

Close

What makes the PPP Series Special


A large basket of identical goods: PriceStats uses a basket of prices from identical product categories sold across countries, aggregated using a common methodology. Existing PPP versions either default to a single-item index (bringing biases from a single company or product particular pricing behavior) or leveraging consumer price indices (CPIs) already available (suffering from differences in the baskets of goods and index construction methodologies across countries).

High-frequency: Our series represent the first real-time measures of PPP in the market. All existing PPP views are updated with a significantly lower frequency (from six months to three years apart).