soddy1979 Wrote:
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> Neoclassical growth theorists hold that economic
> growth is independent of population growth (as
> opposed to classical theorists). Neoclassical
> theorists believe that population growth is a
> function of the opportunity cost of women to work,
> where an increase in this cost leads to more women
> working and thus lower birth rates. Population
> growth is also effected by improvements in
> healthcare and thus lower death rates.
2. International Fisher relation measures expected change in inflation rate to the difference between the two countries' nominal interest rates for that time.
while
Relative PPP measures the inflation rate in each country to the change in the market exchange rate
Idreesz, nicely done. Remember a key thing about Int'l Fischer relation is that it assumes the real exchange rate is constant. Assuming that, a change in the interest rate is completely explained by a change in the inflation rate.