Report Detail Summary

What Makes the Dollar Tick: Purchasing Power Parity?

November 03, 2019

If as we believe inflation is a monetary phenomenon and a low and steady inflation rate is a desirable objective, then during the last few decades the major central banks have done an outstanding job in delivering a low and steady inflation. Furthermore, as we have already argued slightly higher US inflation rate accounts for a low and steady depreciation of the dollar. This in turn yields an important implication: Any large fluctuations in the foreign exchange value of the dollar must be attributed to non-monetary factors.

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The ValueTiming™ strategy is based on the assumption that politicians and policymakers have particular views of the world, and that they will in general adopt policy measures that are consistent with these views.


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