relative to the US leads to an expected appreciation of the domestic currency while higher relative inflation expectations lead …

provide useful information for forecasting exchange rates. After accounting for currency-specific constants, a 10 percent …. Finally, deviations from relative Big Mac parity seem to be helpful in forecasting relative local currency prices. When the U ….S. dollar price of Big Macs is high in a country, the relative local currency price of Big Macs in that country is likely to …