Its declaration and decision to dissolve parliament only days before caused outrage and overshadowed the nominal transfer of power to President Mursi on 30 June.

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This is intellectually dishonest, as the value in money does not come from its nominal value but rather from its purchasing power.

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In this case, increases in nominal compensation would not translate into increased purchasing power for workers but would add to inflation pressures.

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And in a more inflationary economy, lenders will demand, and get, higher nominal interest to compensate for the erosion of purchasing power.

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Typically this arrangement appeals to parties on both the left and the right, such that the nominal ruling party may change but the core group in power remain the same.

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Properly done Purchasing Power Parity (PPP) adjustments are very complicated, but if we judge by 2011 IMF figures than roughly speaking we should boost the nominal value of Russian wages by about 28% to capture their actual purchasing power.

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