PPP model variables

#1
Hi,

I'm a new one on this forum and in desperate need for your help :)))
The problem: I'm trying to run regression on proper PPP (purchasing power parity) model for particular exchange rates.
I know that not all of you are economists and try to explain the model briefly:
based on PPP model, percentage change in exchange rate e.g. between US and EU should equal the inflation differential.

S(USD/EUR) = I(USD) - I(EUR)

so EXPECTED FUTURE EXCHANGE RATE WOULD BE: S0 * (1 + I(USD) - I(EUR))

Now comes a rather long question: If I estimate the expected exchange rate for historical periods and then run the regression: St = a + b*Ste
where Ste is the estimated exchange rate for the period(S0 * (1 + I(USD) - I(EUR)), would it be a relevant model?
 
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