Thus the theory does not provide a simple or ready-made measure of the “true” value of the exchanges. When it is restricted to foreign-trade goods, it is little better than a truism. When it is not so restricted, the conception of purchasing power parity becomes much more interesting, but is no longer an accurate forecaster of the course of the foreign exchanges. If, therefore, we follow the ordinary practice of fixing purchasing power parity by comparisons of the _general_ purchasing power of a country’s currency at home and abroad, then we must not infer from this that the actual rate of exchange _ought_ to stand at the purchasing power parity, or that it is only a matter of time and adjustment before the two will return to equality. Purchasing power parity, thus defined, tells us an important fact about the relative changes in the purchasing power of money in (_e.g._) England and the United States or Germany between 1913 and, say, 1923, but it does not necessarily settle what the equilibrium exchange rate in 1923 between sterling and dollars or marks ought to be. Thus defined “purchasing power parity” deserves attention, even though it is not always an accurate forecaster of the foreign exchanges. The practical importance of our qualifications must not be exaggerated. If the fluctuations of purchasing power parity are markedly different from the fluctuations in the exchanges, this indicates an actual or impending change in the relative prices of the two classes of goods which respectively do and do not enter into international trade. Now there is certainly a tendency for movements in the prices of these two classes of goods to influence one another in the long run. The relative valuation placed on them is derived from deep economic and psychological causes which are not easily disturbed. If, therefore, the divergence from the pre-existing equilibrium is mainly due to monetary causes (as, for example, different degrees of inflation or deflation in the two countries), as it often is, then we may reasonably expect that purchasing power parity and exchange value will come together again before long.