purchasing power parity (PPP)

What is purchasing power parity (PPP)?

purchasing power parity (PPP) definition and meaning on Finance terms:
The rate used for the conversion of one currency into another that equalises the purchasing power of the two currencies by eliminating the differences in the price levels prevailing in the countries concerned. In their simplest form, PPPs show the ratio of the prices in national currency of the same good or service in different countries. <


reference: https://www.ecb.europa.eu/home/glossary/html/index.en.html