Science, Tech, Math › Social Sciences What Is the Difference Between Relative PPP and Absolute PPP? Defining and Understanding PPP Share Flipboard Email Print Social Sciences Economics U.S. Economy Employment Supply & Demand Psychology Sociology Archaeology Environment Ergonomics Maritime By Mike Moffatt Professor of Business, Economics, and Public Policy Ph.D., Business Administration, Richard Ivey School of Business M.A., Economics, University of Rochester B.A., Economics and Political Science, University of Western Ontario Mike Moffatt, Ph.D., is an economist and professor. He teaches at the Richard Ivey School of Business and serves as a research fellow at the Lawrence National Centre for Policy and Management. our editorial process Mike Moffatt Updated March 17, 2017 Q: A: Thank you for your terrific question! To distinguish between the two, first consider the more common form of purchasing power parity, Absolute PPP. Absolute PPP A Beginner's Guide to Purchasing Power Parity Theory (PPP Theory) The idea is expressed in more detail at A Beginner's Guide to Purchasing Power Parity Theory (PPP Theory). Relative PPP PPP Conclusion purchasing power parity arbitrage opportunities to move goods across borders.