What question did this study set out to answer?

The aim is to explore the relationship between PPPs and exchange rates in Turkmenistan's dual rate system.

June 30, 2026Open Access

Interpreting PPPs under a Dual Exchange-Rate System: Evidence from Turkmenistan

Key Points

The aim is to explore the relationship between PPPs and exchange rates in Turkmenistan's dual rate system.
Conducted an exploratory price survey.
Analyzed discrepancies between economic transactions and represented PPPs.
Discussed implications for international comparisons based on matching PPPs with exchange rates.
Found that using a parallel-market exchange rate can lead to an underestimated price level.
Identified a mismatch between the economic transactions represented by PPPs and exchange rates.
Argued for the necessity of aligning PPPs with their intended economic contexts.

Abstract

Productivity Research Notes (PRN Series), No. 2616 Applying a parallel-market exchange rate to the ICP PPP for GDP can imply an implausibly low price level, apparently suggesting that the PPP is underestimated. An exploratory price survey shows instead that the paradox reflects a mismatch between the economic transactions represented by PPPs and exchange rates. The note argues that meaningful international comparisons require matching PPPs and exchange rates to their intended economic transactions.

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