Abstract
In an international and globalize environment such as the national economies are growing in, it is hard to measure and evaluate the performances of each one in comparison with the others. Indeed, currencies are different all around the world and to what we can or cannot afford or in a foreign country with our national currency, we need to measure the purchasing power between a national currency and a foreign currency. Some economists have tried to build two principal tools to compare two economies performances. The first one takes in account and compares the nominal exchange rates on the exchange market between two different currencies. This method is the simplest one and gives an approximation of the real performances of two economies. Empirically, this method has shown a lot of limits and inaccurate results, which takes us to the second method. This one makes a comparison of the purchasing power that a home currency offers in a foreign currency. This tool is called the Purchasing Power Parity.
