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See my above comment on why this is a fallacy. PPP isn’t magic, it only affects goods that are difficult to arbitrage. This is why oil is the same price pretty
by mruts 8y ago
See my above comment on why this is a fallacy. PPP isn’t magic, it only affects goods that are difficult to arbitrage.
This is why oil is the same price pretty much everywhere in the oil. Because if oil was cheaper (including taxes and transport) in one place, someone would buy it and sell it somewhere else.
When everyone is doing this, it equalizes the prices. This is because arbitrage drives up the price of cheaper oil and drives down the price of the expensive
- chrismeller 8y agoDifficult to arbitrage? You just proved the opposite of your own argument. Oil is the same price for many reasons (least of them being OPEC), but largely because of your point - there is a global market. How exactly is the US or UK supposed to export cheap data from India?
- mruts 8y agoThe point is that the cell towers are going to be the same price regardless of location. So PPP isn’t a good justification for why data is cheaper in India. That is all I’m saying.