why is purchasing power parity important 
purchasing power parity is important because it allows economists to compare two different economies primarily the economic productivity and the standard of living among nations it seeks to equalize currencies to determine the value of a basket of goods the bottom linerelative purchasing power parity is an economic theory that suggests exchange rates between two countries currencies should adjust over time to reflect differences in their price levels according to ppp if one country experiences higher inflation than another its currency should depreciate to maintain the same purchasing power across borders promoting equilibrium in international trade 