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Currencies, Commodities and Consumption

Currencies, Commodities and Consumption

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Kenneth W. Clements
Cambridge University Press, 1/31/2013
EAN 9781107014763, ISBN10: 110701476X

Hardcover, 397 pages, 23.1 x 15.5 x 2.3 cm
Language: English

Currency values, prices, consumption and incomes are at the heart of the economic performance of all countries. In order to make a meaningful comparison between one economy and another, economists routinely make use of purchasing power parity (PPP) exchange rates, but while PPP rates are widely used and well understood, they take a lot of effort to produce and suffer from publication delays. Currencies, Commodities and Consumption analyses the strengths and weaknesses of two alternatives to PPP. Firstly, the so-called Big Mac Index, which uses hamburger prices as a standard of measurement, and second, a less well known technique which infers incomes across countries based on the proportion of consumption devoted to food. Kenneth W. Clements uses international macroeconomics, microeconomic theory and econometrics to provide researchers and policy makers with insights into alternatives to PPP rates and make sense of the ongoing instability of exchange rates and commodity prices.

1. Introduction
Part I. Exchange Rates and Prices
2. Purchasing power parity theory and the Big Mac Index
3. Commodity currencies and currency commodities
Part II. Commodity Prices
4. Three facts about marijuana prices
5. Patterns in world metal prices
Part III. International Patterns of Incomes, Prices and Consumption
6. Disparities in incomes and prices internationally
7. Affluence and food
a simple way to infer incomes.

Advance praise: 'The next few decades in global markets are likely to be dominated by the impact of the growth in China and the rest of Asia. Clements provides not only a thorough analysis of currencies and commodity prices to understand this development, he explicitly addresses - and provides great insight into - the mispricing that happens in such markets ... This book is not only a very useful source to understand our changing economic world but it also provides a plethora of useful data from a variety of sources - and the output from Clements' own research - to satisfy both the needs of academics and those analysing financial markets across asset classes. There is sufficient information in an accessible form for readers to extend their own research using Clements' methodology.' Ron Bewley, Woodhall Investment Research Pty Ltd and former Chief Investment Officer, Commonwealth Bank of Australia