Research indicates that deviations from purchasing power parity (PPP) are less pronounced over the long run.

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Long-term deviations from PPP tend to be smaller compared to short-term deviations. This is known as the PPP convergence hypothesis. Over the long run, differences in inflation rates, productivity, and other factors tend to balance out and bring exchange rates closer to the PPP value. However, in the short term, the exchange rates can deviate significantly from PPP due to various factors such as speculation, market sentiment, and unexpected shocks to the economy.

Research Indicates That Deviations from Purchasing Power Parity (PPP) Are