8th Global Conference on Business & Economics
ISBN : 978-0-9742114-5-9
Effect of Exchange Rate, Inflation and Wages on the Purchasing Power of
Consumers in Different Economies
Jian Zhang
Harvard University Extension School, Cambridge, MA, USA
Barr Pharmaceuticals, Inc., Pomona, NY, USA
Tel: (845)362-2753
Fax: (845)362-2832
Acknowledgements
The author would like to thanks Dr. B. Watson for teaching the basic concepts of finance,
B. Kang and S.U. Ahmed for the helpful discussions on the subject, and E. Fitzpatrick for
proofreading the manuscript.
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ABSTRACT
The purchasing power of a consumer depends upon wealth and the prices of the goods
and services. The customer can purchase domestically or from aboard. The domestic
purchasing power is mainly affected by the inflation rate of individual countries, and it is
relatively equitable across mature economies. The international purchasing power is
more volatile and is affected by both exchange rate and prices. A consumer’s buying
power is also influenced by the changes in wages relative to inflation. Analysis of
current exchange rates, prices and wages leads to the belief that foreign shoppers can get
better bargains in Japan and the US at the present time. Consumers in emerging
economies especially China and Russia have experienced significant improvement in
purchasing power recently. They may catch up with the living standard of rich countries
in the future if this growth rate sustains.
INTRODUCTION
The purchasing power of a consumer depends upon wealth and the prices of the goods
and services. The customer can purchase domestically or from aboard if there is a free
trade condition. If the purchase occurs in the international market, exchange rate will
play a role in calculating affordability. Furthermore, a consumer who is employed earns
income while spending. His/her buying power also depends on the changes in wages
relative to inflation. This article discusses the factors such as exchange rate, prices and
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wage level affecting the purchasing power of consumers who reside in various countries
in the world from 2000 to 2008.
PURCHASING POWER PARITY
First, let’s look at the situation of domestic buying. Gustav Cassel developed the
purchasing power parity (PPP) theory in 1920 to compare the purchasing power of
different currencies in their home countries based on the assumption that identical goods
should have the same price (law of one price). PPP exchange rate is defined in Equation
1:
PPP 
P Dom
P For
(Eq. 1)
where PDom is demoestic price, and PFor is foreign price.
The relative purchasing power parity relates the inflation rate (change of prices) in each
country to the change in the market exchange rate and is given in Equation 2:
PPPrel 
Pt For / Pt For
1
Pt Dom / Pt Dom
1
(Eq. 2)
where Pt is the price level in period t. To calculate the relative purchasing power parity
of all of the goods and services consumed in a country, we can substitute Pt with the
consumer price index (CPI) of that country, which leads to Equation 3:
PPPrel 
October 18-19th, 2008
Florence, Italy
CPI tFor / CPI tFor
1
Dom
Dom
CPI t / CPI t 1
3
(Eq. 3)
8th Global Conference on Business & Economics
ISBN : 978-0-9742114-5-9
Figure 1 shows the consumer price indexes of thirteen relatively large countries or
economies. The inflation rate is higher in the emerging economies than in the developed
countries because of the higher rate of economic growth.
Figure 2 shows the changes in relative purchasing power parity of the above economies
calculated by Equation 3. By this calculation, one may conclude that the US dollar has
appreciated against the Mexican, Indian, South African, Brazilian, and Russian currencies
by 10% to 217% while depreciated against the Australian, European, Canadian, British,
Chinese, and Saudi Arabian currencies by 1% to 10% from 2000 to 2008 if the
consumptions are domestic. This can be attributed to the difference in inflation rate of
these countries. Japan’s disinflation condition between 2000 and 2008 caused the US
dollar to weaken approximately 20% over the same time period.
The International Monetary Fund (IMF) has conducted similar calculation that includes
more factors such as gross domestic product (GDP). The PPP exchange rates published
by the IMF are displayed in the following Figure 3. The data shown in Figure 2 are
consistent with the IMF data.
It was recognized by many economists that the PPP exchange rate calculation is not
perfect because of the difficulties in finding the same baskets of goods to compare across
countries. The weighing of goods and services in the CPI index is not identical among
different countries. Often times, the quality of goods and service purchased varies
considerably, for example, Americans probably drive better cars and drink cleaner water
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than many people in developing countries. Moreover, many social benefits offered by
the welfare countries may not be included in the CPI calculations, and this makes direct
comparison of purchasing power difficult. Nevertheless, this methodology gives us a
rough idea how consumers are doing in different economies.
REAL EXCHANGE RATE IN INTERNATIONAL TRADE
When consumers or businesses purchase goods and services from foreign countries, they
will need to exchange the available domestic currency to foreign currencies in order to
fulfill the trade. The price of one currency in terms of another currency is called the
exchange rate, and it is determined by the currency market and in some cases by
individual governments. The exchange rates of twelve foreign currencies to the US
dollar from 2000 to 2008 are shown in Table 1. The US dollar depreciated against most
currencies in terms of market exchange rate after 2002, except for the Mexican Peso and
Brazilian Real (until 2006).
Many people misunderstand the real prices if only the nominal (market) exchange rate is
considered for the trade. For example, a three-bedroom apartment in China costs about
1,500,000 Yuan while a similar apartment in the US cost about 400,000 Dollar. A postdoctorate position in Oxford University in England is paid about 40,000 Pound per year
while a similar position in Massachusetts Institute of Technology in the US is paid
60,000 Dollar per year. The market exchange rates do not reflect the real difference of
the prices. Therefore, the real exchange rate which considers both the nominal exchange
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rate and prices should be used for international trade. The real exchange rate is defined
in Equation 4:
P Dom
Re al Exchange Rate (e)  Nominal Exchange Rate ( E )  For
P
(Eq. 4)
where PDom is domestic price, and PFor is foreign price. Using the above two examples,
the real exchange rates would be 1.8 Chinese apartment = 1 American apartment, and
0.75 Oxford salary = 1 MIT salary in 2008.
If we substitute prices with CPI indexes in the above equation, the real exchange for all
the goods and services can be estimated by Equation 5:
CPI Dom
e  E
CPI For
(Eq. 5)
Figure 4 and Figure 5 show the percent changes of nominal exchange rate and real (CPI)
exchange rate from 2000 to 2008 and the values are not the same. When inflation (price
change) rates are taken into account, the dollar actually strengthens against the Japanese
Yen and Saudi Arabian Riyal while the advantage over the Peso and the Real (until 2005)
diminished. The magnitude of depreciation of the US dollar against the British Pound,
the Euro, the Canadian Dollar, and the Chinese Yuan is 2-5% better in the real rate than
in the nominal rate. On the other hand, the dollar depreciated more against the Indian
Rupee, the South African Rand (after 2002), and the Russian Ruble in the real rate than in
the nominal rate. The real rate and the nominal rate for the Australian dollar are very
similar. This analysis indicates that one would make different decisions in buying
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foreign goods and services when using the real exchange rate versus the nominal
exchange rate.
In addition, if we compare the data in Figure 2 and Figure 5, it is obvious that the PPP
exchange rate fluctuates less dramatically than the foreign exchange rate (except the
Russian Ruble). In other words, foreign exchange rates affect international trade more
than domestic consumption.
WAGE FACTOR
Most consumers except the unemployed and retirees earn wages to make a living.
Employers usually give employees a small wages increase every year to offset inflation.
Figure 6 shows the percentage of wage increase in different countries. The wage increase
in the US, EU, and India is a few percent less than inflation over eight years while the
wages in Canada, Brazil and Australia outpaced inflation by a few percents in the same
period. The wage increase in UK, Mexico, South Africa, China and Russia is even faster,
double to triple digits gain over inflation is observed in these nations. Japan’s wage is
stagnant (or dropping slightly) from 2000 to 2008. It is unclear what exactly causes these
differences; one may speculate that it may relate to the fiscal condition and account
balance of the nations as well as how the governments want to regulate their economy.
For example, commodity producing countries is benefited from the recent purge of
commodity prices; China has a large trade surplus; the Japanese prices may have come
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down from a very high level from decays ago. It will be interested to see how the fast
wage increase in some nations would impact their inflation situation in the future.
The difference in wage changes certainly would have an impact to consumer’s
purchasing power. If we modify Equation 3 and Equation 5 for calculating relative PPP
and real (CPI) exchange rate by a wage factor, the following equations will results:
PPPrel 
CPI tFor / CPI tFor
Wt Dom / Wt Dom
1
1

For
For
CPI tDom / CPI tDom
W
/
W
1
t
t 1
e  E
CPI Dom W Dom

CPI For W For
(Eq. 6)
(Eq. 7)
where W denotes wages. Using this modified calculation, both domestic and foreign
purchasing power will change. Figure 7 and Figure 8 shows the relative PPP and real
exchange rate after adjusting for wage increase. After adjusting for wages, the relative
PPP become almost the same for the US, EU, Canada, Japan (until 2007), India and
Brazil (after 2006). Australia, UK, South Africa, Mexico become the outperformers,
which is not the case without adjusting for wages. China and Russia demonstrate the best
improvement in relative PPP because of the large increase of their wages.
After adjusting for wages, the buying power of Americans in international markets
weakens further relative to most foreign consumers except the Japanese. Meanwhile, the
depreciation of the US dollar against the Euro is about 5% less than before adjustment
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(using the 2008 figure) because of the wage advantage for Americans. As pointed out
earlier, there are pitfalls for direct cross-comparison using the CPI index. Additionally,
other factors such as taxation may complicate the purchasing power calculation. For
example, American income taxes are less than many industrialized countries while poorer
nations probably don’t tax on income as much.
Based on the above analysis, the emerging economies have made big progress in
enhancing the international purchasing power of their citizens, thanks to increases of
international trade, employment and work force productivity. Having said that, the gap
of incomes between citizens of developed and developing countries are still quite large as
shown in the Table 2. Additionally, the consequences of environmental damages and
increased energy consumptions in developing countries due to rapid industrialization may
be debatable issues.
CONCLUSIONS
Exchange rate, prices/inflation and wage level influence the purchasing power of
consumers in domestic and international markets. The domestic purchasing power is
mainly affected by the inflation rate of individual countries, and it is relatively equitable
across mature economies. The international purchasing power is more volatile and is
affected by both exchange rate and prices. Wage changes can further compensate or
deprive purchasing power of consumers. Analysis of current exchange rates, prices and
wages leads to the belief that foreign shoppers can get better bargains in Japan and the
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US at the present time. Consumers in emerging economies especially China and Russia
have experienced significant improvement in purchasing power recently when compared
to themselves. They may catch up with the living standard of rich countries in the future
if this growth rate sustains. Finally, it will be interesting to research the fundamental
economic forces which influence the gauges that are measured in the article.
REFERENCES
1. http://www.worldsalaries.org/
2. International Monetary Fund, World Economic Outlook Database, September
2006
3. Website of Australian Bureau of Statistics
4. Website of Banco de Mexico
5. Website of Bank of England
6. Website of Central Bank of Brazil
7. Website of European Central bank
8. Website of International Organization of Labor
9. Website of the Labor Department of India
10. Website of the Ministry of Economics and Planning of Saudi Arabia
11. Website of the Ministry of Finance of the Russian Federation
12. Website of National Bureau of Statistics of China
13. Website of Statistics Bureau of Japan
14. Website of Statistics Canada
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15. Website of Statistics South Africa
16. Website of the United States Labor Department
17. Website of Wikipedia on purchasing power parity and consumer price index
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Figure 1: Consumer price indexes of representative economies from 2000 to 2008
(source: ref. 3 to16)
650
Consumer Price Index (CPI)
550
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
450
350
250
150
50
2000
2001
CPI
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
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2002
2003
2004
2005
2006
2007
2008
2000
174.0
93.7
90.8
100.0
2001
176.7
94.7
92.6
107.7
2002
180.9
96.3
94.8
120.2
2003
184.3
97.3
96.6
129.5
2004
190.3
98.7
98.9
137.1
2005
196.8
100.8
101.1
142.8
2006
201.8
103.6
103.1
145.9
2007
210.0
105.7
106.2
150.4
2008 (May)
216.6
NA
108.2
156.0
102.2
101.5
100.6
100.3
100.3
100.0
100.3
100.3
101.7
441.0
100.4
97.0
131.3
93.2
100.0
100.0
98.9
458.0
101.1
97.7
135.4
97.4
121.4
105.7
97.8
477.0
100.3
101.5
139.5
102.9
140.6
115.4
98.0
496.0
101.5
103.6
142.8
107.0
159.8
122.1
98.6
514.0
105.5
105.8
146.5
112.6
177.3
123.8
98.9
536.0
107.4
108.0
150.6
116.3
199.7
128.0
99.6
563.0
109.0
109.8
155.5
121.0
219.0
134.0
101.8
600.0
116.7
112.4
160.1
125.6
238.8
143.5
106.0
636.0
NA
113.9
162.2
128.1
270.9
151.5
115.0
12
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Figure 2: Relative purchasing power parity of representative economies from 2000 to
2008
2.3
2.1
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
1.9
Relative PPP
1.7
1.5
1.3
1.1
0.9
0.7
2000
2001
Rel. PPP exchange
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
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2000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
2002
2003
2001
1.000
0.995
1.005
1.060
0.978
1.023
0.992
0.992
1.015
1.028
1.195
1.041
0.974
2004
2002
1.000
0.989
1.004
1.156
0.947
1.040
0.961
1.006
1.022
1.061
1.352
1.110
0.953
2005
2003
1.000
0.980
1.005
1.223
0.927
1.062
0.954
1.008
1.027
1.083
1.509
1.153
0.941
13
2006
2004
1.000
0.963
0.996
1.254
0.897
1.066
0.960
0.997
1.020
1.104
1.621
1.132
0.914
2007
2005
1.000
0.951
0.985
1.262
0.865
1.075
0.945
0.984
1.014
1.103
1.766
1.132
0.890
2008
2006
1.000
0.953
0.979
1.258
0.846
1.101
0.936
0.976
1.021
1.119
1.888
1.155
0.888
2007
1.000
0.935
0.969
1.246
0.813
1.127
0.963
0.960
1.010
1.116
1.978
1.189
0.888
2008
1.000
NA
0.958
1.253
0.799
1.158
NA
0.943
0.992
1.104
2.176
1.217
0.934
8th Global Conference on Business & Economics
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Figure 3: PPP exchange rate published by the International Monetary Fund (IMF, ref. 2)
18
National Currency per International Dollar
16
United States
United Kingdom
Germany
Brazil
Japan*
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
14
12
10
8
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
Note*: x100 for Japanese currency.
Country
United States
United Kingdom
Germany
Brazil
Japan*
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
2000
1.000
0.645
0.934
0.867
1.498
8.473
1.828
1.218
1.362
6.195
6.833
2.110
2.678
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2001
1.000
0.645
0.923
0.909
1.448
8.570
1.822
1.203
1.380
6.411
7.773
2.219
2.526
2002
1.000
0.654
0.919
0.985
1.407
8.630
1.801
1.193
1.393
6.737
8.833
2.413
2.554
2003
1.000
0.662
0.912
1.111
1.364
8.803
1.813
1.207
1.406
7.171
9.870
2.476
2.649
14
2004
1.000
0.663
0.893
1.172
1.310
9.006
1.891
1.215
1.421
7.501
11.507
2.569
2.864
2005
1.000
0.659
0.876
1.211
1.266
9.235
1.917
1.221
1.451
7.696
13.512
2.633
3.250
2006
1.000
0.661
0.866
1.231
1.237
9.593
1.895
1.206
1.460
7.792
15.326
2.707
3.534
2007
1.000
0.669
0.864
1.270
1.233
9.989
1.929
1.211
1.477
7.964
16.692
2.808
3.698
8th Global Conference on Business & Economics
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Figure 4: Changes of nominal exchange rate from 2000 to 2008
190
Percent Change of Nominal Exchange Rate
170
150
130
110
107.08
102.63
100.00
93.32
91.76
83.33
82.05
90
United States
British Pound
Euro
Brazilian Real
Japanese Yen
Indian Rupee
Chinese Yuan
Canadian Dollar
Australian Dollar
Mexico Peso
Russian Rouble
South African Rand
Saudi Arabian Riyal
75.00
70
68.03
58.60
57.87
50
2000
2001
% Change (E)
US Dollar
Pound
Euro
Real
Yen
Rupee
Yuan
Can $
Aus $
Peso
Rouble
Rand
Riyal
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2002
Dec-00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
2003
2004
Dec-01
100.00
102.99
104.63
118.97
114.91
103.10
100.00
106.00
108.89
95.42
107.80
157.89
100.00
Dec-02
100.00
92.54
88.89
182.05
104.39
102.67
100.00
105.33
98.89
108.64
113.12
113.16
100.00
2005
Dec-03
100.00
82.92
73.49
148.21
93.86
97.33
100.00
86.00
73.89
116.96
103.90
86.84
100.00
15
2006
2007
Dec-04
100.00
77.74
68.59
136.41
90.35
92.83
100.00
80.00
71.67
116.02
98.58
75.00
100.00
2008
Dec-05
100.00
86.27
77.81
117.95
103.51
96.26
97.83
78.00
75.56
110.61
102.13
83.55
100.00
Dec-06
100.00
76.54
70.68
109.74
104.39
95.07
95.10
78.00
70.56
112.49
93.26
92.76
100.00
Dec-07
100.00
75.76
63.42
91.28
97.47
83.88
88.16
66.00
63.33
113.63
87.23
90.13
100.00
Jun-08
100.00
75.00
58.60
82.05
93.32
91.76
82.85
68.03
57.87
107.08
83.33
102.63
100.00
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Figure 5: Changes of real (CPI) exchange rate from 2000 to 2008
Percent Change of Real (CPI) Exchange Rate
170
150
130
116.75
110
107.07
100
97.03
91.55
90
84.34
81.07
79.22
72.13
70
65.50
61.20
58.32
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
50
38.30
30
2000
% Change (e)
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
Saudi Arabia
2001
2002
Dec-00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
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2003
Dec-01
100.00
103.48
104.12
112.21
117.50
100.82
100.85
106.87
107.23
92.82
90.18
151.70
102.69
2004
Dec-02
100.00
93.61
88.54
157.46
110.25
98.69
104.08
104.66
96.77
102.35
83.65
101.95
104.92
2005
Dec-03
100.00
84.58
73.13
121.22
101.30
91.66
104.77
85.29
71.96
107.97
68.87
75.33
106.24
16
2006
Dec-04
100.00
80.71
68.85
108.82
100.69
87.11
104.12
80.22
70.25
105.13
60.81
66.26
109.37
2007
Dec-05
100.00
90.71
79.02
93.43
119.65
89.57
103.48
79.24
74.50
100.31
57.84
73.83
112.31
2008
Dec-06
100.00
80.29
72.21
87.22
123.36
86.37
101.62
79.92
69.09
100.53
49.39
80.29
112.67
Dec-07
100.00
81.07
65.43
73.27
119.88
74.42
91.55
68.75
62.70
101.86
44.10
75.82
112.63
Jun-08
100.00
NA
61.20
65.50
116.75
79.22
NA
72.13
58.32
97.03
38.30
84.34
107.07
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Figure 6: Wage increase in different countries from 2000 to 2008 (source: ref. 1, 3 to 14)
670
Percent Wage Increase
570
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
470
370
270
170
70
-30
2000
2001
% Wage Increase
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
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2000
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2002
2003
2001
3.59
3.42
2.67
8.26
-0.96
2.53
16.08
1.42
3.30
12.58
45.75
9.56
2004
2002
4.79
7.24
5.31
15.51
-3.85
5.80
32.57
3.56
6.92
20.10
96.13
21.34
2005
2003
6.84
11.25
7.50
11.63
-3.95
9.67
49.67
4.97
10.87
28.75
147.37
26.13
17
2006
2004
10.60
16.24
9.55
10.50
-4.72
13.79
70.58
7.18
14.22
34.80
203.19
38.02
2007
2005
12.65
20.55
11.59
12.76
-3.75
23.87
95.01
10.63
20.21
42.32
284.84
39.88
2008
2006
16.58
25.54
14.05
18.39
-2.79
29.29
123.47
13.93
25.77
51.40
378.36
52.51
2007
19.66
30.33
16.17
50.68
-3.08
36.88
NA
17.58
30.73
-31.18
511.47
NA
2008
22.91
32.09
NA
57.20
-19.92
41.23
NA
20.44
31.58
NA
666.31
NA
8th Global Conference on Business & Economics
ISBN : 978-0-9742114-5-9
Figure 7: Relative purchasing power parity from 2000 to 2008 after adjusting for wage
increase
1.3
1.2
Rel. PPP adj. for wages
1.1
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
2000
Rel. PPP adj for
wage
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
2001
2000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
October 18-19th, 2008
Florence, Italy
2002
2001
1.000
0.997
1.014
1.014
1.023
1.033
0.885
1.013
1.018
0.946
0.850
0.984
2003
2002
1.000
0.966
0.998
1.049
1.032
1.030
0.759
1.018
1.002
0.926
0.723
0.959
2004
2005
2003
1.000
0.941
0.997
1.170
1.031
1.034
0.681
1.026
0.989
0.899
0.652
0.976
18
2006
2004
1.000
0.916
1.002
1.255
1.042
1.036
0.623
1.029
0.988
0.905
0.591
0.907
2007
2005
1.000
0.889
0.989
1.261
1.013
0.977
0.546
1.002
0.950
0.873
0.517
0.911
2008
2006
1.000
0.885
0.993
1.239
1.015
0.993
0.488
0.999
0.947
0.862
0.460
0.883
2007
1.000
0.858
0.988
0.989
1.004
0.985
0.448
0.977
0.925
1.940
0.387
NA
2008
1.000
0.000
NA
0.979
1.227
1.008
NA
0.962
0.927
NA
0.349
NA
8th Global Conference on Business & Economics
ISBN : 978-0-9742114-5-9
Figure 8: Real exchange rate from 2000 to 2008 after adjusting for wage increase
Percent Change in Real Exchange Rate adj. for wages
160.0
148.0
140.0
120.0
100.0
100.0
80.0
77.4
60.0
61.4
74.4
70.0
66.7
65.1
58.2
57.4
42.6
40.0
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
20.0
8.6
0.0
2000
% Change e adj. for
Wage
United States
United Kingdom
European Union
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
October 18-19th, 2008
Florence, Italy
2001
2000
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
2002
2003
2001
100.00
103.64
105.05
107.37
122.90
101.86
89.99
109.16
107.53
85.40
64.09
143.43
2004
2002
100.00
91.47
88.04
142.85
120.15
97.74
82.26
105.89
94.84
89.29
44.69
88.04
2005
2003
100.00
81.22
72.55
116.02
112.67
89.29
74.79
86.81
69.34
89.59
29.74
63.81
19
2006
2004
100.00
76.79
69.29
108.91
116.87
84.67
67.51
82.78
68.02
86.26
22.18
53.09
2007
2005
100.00
84.76
79.38
93.34
140.04
81.46
59.78
80.68
69.82
79.40
16.93
59.46
2006
100.00
74.56
73.27
85.88
147.94
77.87
53.02
81.77
64.05
77.41
12.04
61.37
2007
100.00
74.43
66.73
58.18
148.00
65.06
42.60
69.97
57.39
NA
8.63
NA
8th Global Conference on Business & Economics
ISBN : 978-0-9742114-5-9
Table 1: Market exchange rate from 2000 to 2008
Nominal Exchange Rate (E)
US Dollar
British Pound
Euro
Brazilian Real
Japanese Yen
Indian Rupee
Chinese Yuan
Canadian Dollar
Australian Dollar
Mexico Peso
Russian Rouble
South African Rand
Saudi Arabian Riyal
Dec-00
1.0
0.7
1.1
2.0
114.0
46.8
8.3
1.5
1.8
9.6
28.2
7.6
3.8
Dec-01
1.0
0.7
1.1
2.3
131.0
48.2
8.3
1.6
2.0
9.2
30.4
12.0
3.8
Dec-02
1.0
0.6
1.0
3.6
119.0
48.0
8.3
1.6
1.8
10.4
31.9
8.6
3.8
Dec-03
1.0
0.6
0.8
2.9
107.0
45.5
8.3
1.3
1.3
11.2
29.3
6.6
3.8
Dec-04
1.0
0.5
0.7
2.7
103.0
43.4
8.3
1.2
1.3
11.2
27.8
5.7
3.8
Dec-05
1.0
0.6
0.8
2.3
118.0
45.0
8.1
1.2
1.4
10.6
28.8
6.4
3.8
Dec-06
1.0
0.5
0.8
2.1
119.0
44.4
7.9
1.2
1.3
10.8
26.3
7.1
3.8
Dec-07
1.0
0.5
0.7
1.8
111.1
39.2
7.3
1.0
1.1
10.9
24.6
6.9
3.8
Jun-08
1.0
0.5
0.6
1.6
106.4
42.9
6.9
1.0
1.0
10.3
23.5
7.8
3.8
2004
647.0
790.5
582.5
79.6
699.8
17.6
37.0
585.5
595.6
89.6
60.6
302.1
2005
659.0
738.6
523.9
93.9
617.0
18.5
43.2
619.9
594.6
99.3
74.3
274.8
2006
682.0
867.0
590.9
106.0
618.0
19.6
50.9
638.4
666.1
103.8
101.1
269.9
2007
700.0
909.4
672.5
162.2
659.9
23.5
63.2
778.6
771.4
2008
719.0
931.0
0.0
188.3
569.4
22.1
0.0
773.8
849.7
138.1
181.2
Table 2: Weekly Wages from 2000 to 2008
Weekly Wage (in US$)
United States
United Kingdom
European Union*
Brazil
Japan
India
China
Canada
Australia
Mexico
Russia
South Africa
2000
585.0
528.6
363.5
98.3
663.6
14.4
21.7
437.0
373.7
77.1
19.7
164.1
2001
606.0
530.9
356.7
89.4
571.9
14.3
25.2
418.2
354.5
91.0
26.6
113.9
2002
613.0
612.6
431.0
62.4
611.2
14.8
28.7
429.7
404.0
85.3
34.2
176.0
2003
625.0
709.3
532.7
74.0
679.1
16.2
32.4
533.4
560.8
84.9
46.9
238.4
Note*: The EU wage is an average of Germany, France, Italy and Spain.
October 18-19th, 2008
Florence, Italy
20