🚀 go-pugleaf

sinister wrote:
> <royls@telus.net> wrote in message news:42c4be4f.40409986@news.telus.net...
> 
>>On 30 Jun 2005 20:18:40 -0700, "TXZZ" <superoutland@aol.com> wrote:
>>
>>
>>>Yea how does the yen/dollar exchange rate affect pricing?  I mean,
>>>shouldnt the exchange rate instead be adjusted?
>>
>>It is constantly being adjusted by market participants.
>>
>>
>>>ok, if you cant tell where Im going with this, for a hypothetical
>>>question, they always use examples like"the yen is 360 to the dollar,
>>>so you could by 3 books.  But now its only 120 to the dollar so you can
>>>only buy one book".  This sorta logic is used when discussing
>>>economics, but doesnt that just mean the dollar/yen exchange rate would
>>>be wrong?
>>
>>Why would it be "wrong"?
> 
> 
> Of course, there is no "wrong".
> 
> But the original poster's question does hint at a question that AFAICT 
> economics hasn't been able to answer:  why exchange rates fail to normalize 
> in terms of PPP even over the long haul.

I thought the standard answer was that many forms of capital are not 
mobile, even over the long haul.  Things like a country's legal system 
and the average education of its participants affect the value of 
capital in an economy too, do they not?

-- 
Curt Fischer