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fx_purchasing-power-parity

Read-onlyIdempotent

Estimates fair value of an FX rate using purchasing power parity. Provide domestic and foreign inflation rates and base spot rate to get PPP-implied fair value and percentage over/undervaluation.

Instructions

Purchasing power parity fair value estimation.

Use when estimating fair value of an FX rate using PPP. Provide domestic and foreign price indices and base-period exchange rate. Returns: PPP-implied fair value rate and over/undervaluation percentage.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
time_yearsNoTime horizon in years
base_spot_rateYesCurrent spot exchange rate
foreign_inflationYesForeign inflation rate
domestic_inflationYesDomestic inflation rate
Behavior4/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint=true and idempotentHint=true, indicating safe read operation. The description adds that the tool returns fair value and over/undervaluation percentage. No contradictions. Could mention assumptions (e.g., relative PPP), but adequate given annotations.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Two sentences with no fluff. First sentence provides a clear title-like purpose, followed by usage instructions and output. Perfectly front-loaded and concise.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness4/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given annotations and schema, the description covers what the tool does, required inputs, and output. No output schema, but return values are described. Could be more detailed about assumptions (e.g., using relative PPP), but sufficient for an agent to use correctly.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100% with descriptions for all four parameters. The description paraphrases some inputs but adds no significant new meaning beyond what the schema provides. Baseline 3 is appropriate.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the tool estimates fair value using PPP, with a specific verb ('estimation') and resource ('FX rate using PPP'). It distinguishes from sibling tools like fx_forward-rate or fx_carry-trade by highlighting the PPP methodology, though no explicit comparison is made.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines4/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicitly states when to use ('when estimating fair value of an FX rate using PPP') and what inputs to provide (domestic/foreign price indices, base-period exchange rate). Does not mention when not to use or alternatives, but the context is clear.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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