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Purchasing Power Parity: Data Example

This is the Purchasing Power Parity example I use in Economics 321 (International Monetary Theory) and Economics 343 (Macroeconomic Data Analysis). I dust it off for other courses as well!

It shows how to manage a dataset and calculate some simple statistics, as well as generate graphs and tables using R. At the same time, it demonstrates the relationship between two countries' inflation differentials and appreciation in the exchange rate—the so-called "relative" PPP condition.

.R file
Youtube video (working the .R file)
Python version (Jupyter notebook) (pretty basic)

Here is a detailed walkthrough using R:

R tutorial


More information is available at www.scotthegerty.com.

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My go-to example for a key concept and data analysis in undergraduate econ.

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