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Author Question: Explain briefly PPP and IRP. Why might the latter hold better than the former over time? What ... (Read 20 times)

sdfghj

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Explain briefly PPP and IRP. Why might the latter hold better than the former over time?
 
  What will be an ideal response?

Question 2

Explain why East Asian countries have done so well relative to South American countries.
 
  What will be an ideal response?



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tofugiraffe

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Answer to Question 1

IRP holds better because financial asset prices adjust faster to new information than goods prices.

Answer to Question 2

Mainly, the reasons are: less moral hazard, less government debt to foreigners and smaller budget deficits in East Asian countries.




sdfghj

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Reply 2 on: Jun 30, 2018
:D TYSM


steff9894

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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