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Reference.org
Relative purchasing power parity
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<p>Relative Purchasing Power Parity is an <a href="/facts/Economics/HYctA2Dn">economic theory</a> which predicts a relationship between the inflation rates of two countries over a specified period and the movement in the exchange rate between their two currencies over the same period. It is a dynamic version of the absolute <a href="/facts/Purchasing_power_parity/qpRMGaXG">purchasing power parity</a> theory. </p><p>A reason for the prominence of this concept in economic research is the fact that most countries publish inflation data normalized to an arbitrary year, but not absolute price level data. </p>