Does the relative population growth affect purchasing power parity?
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Relative population growth affects price levels through its effect on money demand and that in turn impacts Purchasing Power Parity (PPP). Standard time series econometrics is used to investigate this issue using data from 30 selected countries. The empirical results show that there is stable relationship between PPP exchange rate and relative population growth in selected countries in the long run. These findings demonstrate that population growth influences exchange rate determination through PPP.
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Salim, Ruhul and Hassan, Kamrul. 2009. Does the relative population growth affect purchasing power parity?. Applied Economic Letters 16: pp. 103-107.
This is an electronic version of an article published in Applied Economics Letters is available online at: http://www.informaworld.com/
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