Wartime inflation, however, implied that the pound was overvalued, and this overvaluation led to trade deficits and substantial gold outflows after 1925.
Easy financing conditions for German banks, firms and households were coming to an end.Some may still want to call that an (atypical) balance-sheet recession, but there were "structural" problems, too: rigid labour markets, Germany's overvaluation within the euro and deindustrialisation pressures in the world's most industrialised country.
The difference between the price predicted by the red line for each country, given its income per head, and its actual price offers a better guide to currency under- and overvaluation than the PPP-based "raw" index.This alternative recipe, with its adjustment for GDP per person, indicates that the Brazilian real is still badly overcooked, at more than 100% too dear (see lower chart).
SHORT-SELLERS perform a valuable function in financial markets, exposing managerial incompetence, corporate fraud or plain overvaluation.
But it is not so appealing in absolute terms.* the q ratio, which compares companies to the replacement cost of their net assets, shows a similar level of overvaluation.
The fall is treated as proof of overvaluation due to the initial, wrong statement.Increasingly, a similar logic has been used in criminal cases, as Mr Olis discovered.
A period of strong performance leads to overvaluation, from which subsequent returns are inevitably disappointing.Has that stage arrived?
The other measure, the ratio of prices to disposable income per person, stretches from a 35% overvaluation in France to a 36% undervaluation, again in Japan.America's housing-market revival looks sustainable in part because the sharp correction in house prices over the past few years has made homes cheap by historical standards.
Singapore and Hong Kong also look vulnerable to a correction, given the overvaluation on their price-to-rents ratios.Misalignments with our gauges of fair value can persist for a long time, of course.
French officials blame tight supply but the government has acknowledged the possibility of "overvaluation".
Private investment increases as fear of sudden yen appreciation and overvaluation is eliminated.
